Introduction
The past year was indeed a challenging one for the Communal Co-operative Credit Union Limited, as we continue to reform and shape ourselves to deal with the changing face of the financial sector in Grenada, while at the same time maintaining the philosophies of the movement.
During the year, the Communal was also confronted with the ongoing economic problems that were aggravated by the new threats from international markets and the liberalization of the world trade organisation.
Board of Directors
At the 20th Annual General Meeting of the Communal, Sis. Jocelyn Paul and Bro. Brian Campbell were elected into office. Five (5) other Directors were serving unfinished terms, namely Bros. Philbert Lewis and Alban Belmar and Sisrs. Claudia Alexis, Lydia Courtney and Joanne Noel.
The Board assumed office in May 2002 and at its first meeting, the following officers were elected:-
| Lydia Courtney |
President |
| Brian Campbell |
Vice President |
| Philbert Lewis |
Treasurer |
| Jocelyn Paul |
Secretary |
| Joanne Noel |
Asst. Secretary/Treasurer |
Sis. Jocelyn Paul however resigned during the year, to further her studies abroad.
Immediately on assuming office, the Board sought to assess the key functional areas within the organisation. Consequent to this examination, certain desirables were identified that will maximise our competitive advantage. Among these were Financial Performance, Human Resource Management, Operations and Process Review and Diversification of Services.
Financial Performance
During the year under review, the Credit Union experienced positive growth in most areas of its operations. The following table provides a comparative analysis of year on year performances for the past three (3) years.
|
INDICATORS
|
TOTALS
|
% CHANGE
|
|
2002
|
2001
|
2000
|
2002
|
2001
|
| Members |
6459
|
5694
|
5095
|
13
|
12
|
| Shares |
2,196,009
|
1,454118
|
855,138
|
51
|
70
|
| Deposits |
14,979,195
|
12,159,258
|
10,263,370
|
23
|
18
|
| Loans |
13,733,913
|
11,625,454
|
9,731,228
|
18
|
19
|
| Assets |
20,381,167
|
16,901,147
|
13,971,373
|
21
|
21
|
It is encouraging to note that despite many challenges, all significant areas of operations showed growth year on year and members were able to save more, despite the economic constraints that they faced. We hope this trend will continue.
The number of members increased by 765, the largest growth rate recorded in the past five (5) years.
Expenses
During the year, expenses increased by 35%. As the Communal continues to reposition itself in the financial sector, marketing and member education occupied a significant amount of our resources and this has been one of the major areas of increase in expenditure. Salaries and wages and related employee costs also showed increases, while for the first time, building depreciation has been expensed for a whole year.
We anticipate an increase in the salaries figure in 2003 due to the effects of adjustments resulting from the Union Settlements.
Delinquency
This very important area of management of our business occupied the Board's attention during this year, because of the serious impact this cost can have on our operations.
Rigorous management of the delinquency procedures have been put in place and the office has undertaken an improvement in record keeping of members' information and collateral. This has led to useful management information, which aids both the Board and management in controlling delinquency. At the end of the year, the Communal recorded a delinquency of 5.5%.
Investments
The Board of Directors continues to manage the Communal Investment Portfolio to ensure the best returns. The Board examines the mix of investments, and in a market where interest rates have been contracting, has been able to obtain maximum rates. Investments at the end of December 2002 totalled $3,570,639 (2001 was $2,153,137).
At this time in our operations, it may be prudent to examine investments in other industries as well as in other markets. However, our greatest source of returns has been from our investment in loans.
Human Resource Management
Staffing
As we continue to grow, the Board re-examines the Credit Union's operations to make strategic decisions that will ensure it keeps its foothold in the marketplace.
As part of its institutional strengthening, an additional Loans Officer and an Administrative Assistant for the Loans Department were hired. An Internal Auditor was also appointed during the year. Marketing is becoming an important focus of the Communal and the addition of a Marketing Department is being given due consideration. There was one (1) resignation during the year.
Training and Development
It has been recognized that training is a key element in equipping the organisation to undertake the many goals that have been set.
Staff participated in training - both personal and institution conducted programmes. Of paramount importance was equipping staff with computer software knowledge in CUMIS and hands on training was conducted at the Communal's Office for over a period of 6 months.
Cross training has been receiving much focus, as we equip the staff with additional skills to ensure diversity and continuity of operations.
Unionization of Staff
The Grenada Technical and Allied Workers' Union has been officially recognized as the bargaining agent for the staff. Union negotiations are currently on going.
Operations And Process Review
In response to members' requirements and changes in the industry, the Communal continuously reviews its operations to ensure:
- Institutional strengthening,
- Members' needs are met
- Enforce compliance with standards and regulations governing the industry
Anti-Money Laundering Regulations
The Communal is now in strict compliance with the Money Laundering Act of Grenada. Members are therefore required to declare sources of funds for deposit amounts in excess of $10,000. Members of staff have received training in the regulations and are required to enforce the law and ensure the protection of the Credit Union against any breaches.
Members are advised that their co-operation is required in this respect. The Bye-law has been amended to include this new requirement.
Loan Policy Review
In response to members' requests, the procedure for approving loans has received much focus from the Board, Credit and Supervisory Committees. A sub-committee was appointed to review the loans policy and to make recommendations for improvement.
We are happy to report that measures have been put in place to reduce the time taken for loan approvals and to re-enforce the adequacy of safety and soundness of the loan portfolio of our Credit Union.
Affiliation
During the past year, co-operation was established with a number of organisations, both locally and regionally.
Eastern Credit Union
At the first ever held Communal Credit Union Open Day on October 15th 2002, an agreement was signed with Eastern Credit Union of Trinidad and Tobago, which established co-operation in many areas.
The Communal has already benefited from procedural manuals provided by Eastern Credit Union. These manuals will be tailored to our needs. Exchange visits are planned quarterly with Eastern.
The Manager of the City of Bridgetown Credit Union, Barbados, visited Communal in order to establish co-operation. Advice has been given and experiences shared on a number of areas where focus can be placed to ensure growth in the ensuing year.
National Housing Authority - Dunfermiline Project
The Communal has entered into an agreement with Housing Authority of Grenada, whereby the Credit Union will be offering financing at competitive rates to clients desirous of purchasing a home under this project. The Credit Union is happy to be a part of this agreement and looks forward to participating in the development of Grenada.
Enterprise Development Facility (Rural Credit Scheme)
The Communal has been identified as one of the Financial Institutions in Grenada to administer the Rural Credit Scheme, a programme co-ordinated by the Ministry of Finance.
Under the programme, small businesses can receive grant money to establish their business operations and obtain a loan from the Credit Union to commence/expand the business.
Diversification of Services
The Communal Foundation
The Communal has identified the need for the establishment of a "not-for-profit" arm of the Credit Union, which will be in furtherance of the social responsibility of the Communal.
A number of objectives in the overall context of areas of developmental needs in Grenada, have been identified. These include Health, the Environment, Education and Human Resource Development, Vulnerable Groups (youth & elderly) Civil Society, among others.
It is also expected, that the current Jump Start Programme will become a part of the foundation's responsibility, as the sponsors of the programme advocate that it should be run by "non-profit" organisations.
Launch of New Services
Two (2) new services are being launched by the Credit Union for its members. The focus has been on the members well being and therefore education and preparation for retirement are the two areas of concentration.
The Education Savings Scheme and the Retirement Savings Plan are the two (2) services being launched. Members are encouraged to maximise the use of these services.
Future Direction
The Board is committed to the task of building and strengthening the Communal. Equal to the task is your unswerving commitment of our motto "To Grow with us, Save with us"
In keeping with our commitment, we are determined to achieve results, through the following areas:-
- Financial Strengthening - ensure financial growth and stability through prudent management and to continue to show surpluses
- Institutional Strengthening - development of human resource and operational processes to cope with the challenges of change
- Technical Assistance through affiliation - broaden associations and alliances and to benefit from such relationships
- Diversification - engage in non-traditional business operations to expand the business and meet the needs of members
Proposed Dividend
The net surplus for the year is $432,678, of which at least 20% must be set aside for the statutory reserve as required by the Co-operative Societies Act 20 of 1996. In accordance with Section 120, Sub section 2 of the Co-operative Societies Act 20 of 1996, the Communal has set aside 5% for the development fund to be administered by the League.
In addition, the Board proposed that the sum of $40,000.00 be set aside for establishment of the Foundation Expenses.
A dividend of 7% on shares for the financial year 2002 is being proposed.
Conclusion
The Board would like to conclude this report by emphasizing the fact we have completed a very challenging year and have shown our resilience in times of obscurity.
The threat of new legislation, the increased competition in the market place for what was traditionally believed to be credit union clientele and the potential of money laundering are all new threats and challenges for the Communal.
The organisation must become more aggressive and reform itself in this most challenging time of our operations. We therefore seek the understanding and blessing of our membership, as we must adopt non-traditional methods if we are to remain competitive and survive at this time in our history.
Acknowledgement
The Board would like to place on record its sincere appreciation to the Staff, Management and other elected officials for their hard work and dedication during the past year. The Board also wishes to thank all those volunteers who served on Committees during the past year.
We take this opportunity to extend our appreciation to the members for affording us the opportunity to serve.
|
|
|
|
|
Lydia Courtney
President
|
Brian Campbell
Vice President
|
Philbert Lewis
Treasurer
|
|
|
|
|
|
Joanne Noel
Asst. Secretary/Treasurer
|
Alban Belmar
Director
|
Claudia Alexis
Director
|
|
Introduction
The financial performance of the Communal Co-operative Credit Union for the period under review can be considered good against the backdrop of declining performance in most sectors of local, regional and international economies. We have seen growth in all areas, which indicates a high level of members and non-members confidence in the ability of the organization to manage their finances.
Assets and Liabilities
Total Assets have increased by twenty-one percent (21%), mainly due to an eighteen percent (18%) growth in loans, and sixty-five percent (65%) growth in short term investments. This substantiates the point made earlier, that members are continuing to use the facilities of the Credit Union and their confidence is intact.
The graphical presentation on page 20 gives an indication of the financial performance for 2002.
Surplus
Although there was an eight percent (8%) increase in net income over 2001, the surplus after deposit interest has declined by fourteen percent (14%) for the same period. The contributing factor is a thirty-five percent (35%) increase in General and Administration expenses. Areas of interest are as follows:
1. Salaries and Wages
A thirty-seven percent (37%) increase over 2001 is due to a twenty-seven (27%) percent increase in staff. This was necessary to improve the quality of service to members. Membership has grown by thirteen percent (13%).
2. Advertising and Promotion
There is absolutely no doubt that the Communal Co-operative Credit Union is a household name in Grenada. The increased advertising and involvement in enormous promotional activities are some of the contributing factors. The true results of these activities will be seen in future years as one anticipates enormous growth in Deposits, Loans and Shares.
3. Depreciation
Depreciation in 2001 was only twenty nine thousand, five hundred and sixty-five dollars ($29,565.00). This was due to the fact that no depreciation was taken on the new building on its first few months of existence in 2001, in keeping with International Accounting Principles. However, in 2002 full depreciation was realized, hence the reason for an increased depreciation to ninety three thousand, four hundred and seventy-four dollars ($93,474.00).
Performance Indicators
The table below outlines the results of the performance standards as set by the Caribbean Confederation of Credit Unions and the Eastern Caribbean Central Bank.
The ratings for most of the indicators are excellent except Asset Quality. Urgent measures are required to reduce delinquency to about 3%
| Indicators |
2002
|
2001
|
2000
|
1999
|
Rating
|
Protection:
Capital/Total Asset |
21.3%
|
17.78%
|
9%
|
10%
|
Excellent |
Earnings:
Net Income To Average Assets |
3.42%
|
4.72%
|
4.5%
|
4%
|
Excellent |
Asset Quality:
Delinquent Loans/Total Loans |
5.5%
|
5.6%
|
4.5% |
5%
|
Average |
Liquidity:
Loans To Total Assets |
67.3%
|
69%
|
70%
|
75%
|
Excellent |
Appreciation
Many thanks to fellow Directors, Management and Staff of the Communal Co-operative Credit Union for their great assistance and co-operation during 2002, and look forward to your continued support.
Philbert Lewis - TREASURER
|
