BRIDGETOWN, Barbados – Credit unions in this country soon may offer members deposit insurance after accepting a World Council of Credit Unions (WOCCU) designed program.
According to WOCCU, the program's implementation not only will strengthen the Caribbean nation's credit union movement, but enable it to compete more effectively with foreign banks that currently dominate the island.
"Credit unions are Barbados' only locally-owned financial institutions and serve more than two-thirds of the population," said Dave Grace, WOCCU VP of association services, who led the design of the deposit insurance system. "It's time that credit union member deposits were given the same level of government guarantee with deposit insurance as those held by foreign-owned banks."
Credit unions' unanimous support for the program came after a series of meetings Grace held with Barbados' policymakers and officials.
The deposit insurance design delivered last week calls for credit union members to maintain a minimum of BDS$25,000 (US$12,500) in deposit insurance, which will utilize the Barbados Deposit Insurance Fund (BDIC). But the design also advocates for establishing a credit union fund separate from the commercial bank fund within the agency, and requires credit unions to attain minimum financial standards to enter into the deposit insurance system.
WOCCU and BCCUL hope to have the needed legislative changes enacted later this year.
