The cooperative movement continues to be obstructed in its forward thrust by the lack of proper legislation, especially regarding regulatory issues. This was highlighted by Brian Matthew, president of Aero Services Credit Union (ASCU), when he delivered his message at its 47th annual general meeting at Trinity College East, Trincity recently.
Attacking the issue head-on, he said, “We continue to be frustrated, like many of our credit union brothers and sisters, in our quest for relief from three major constraints – a) the credit union beneficiary issue; b) the inability to encash government cheques, and c) the inordinately long delay in obtaining the requisite permission to facilitate joint accounts.”
Dealing with the matter, Matthew said, “We are virtually being stymied by a combination of outdated legislation which govern credit union operations. Through the efforts of our credit union ‘umbrella bodies’ we continue to lobby on behalf of the hundreds of thousands of credit union members for long awaited relief. We are literally ‘waiting to exhale’."
Touching on the economy, the president hinted that there was some evidence in 2018 of improvement in both the energy and non-energy sectors “with modest growth being experienced”. He said, “In the second and third quarters of 2018, economic activity was characterised by higher prices and greater output in the oil and gas sectors respectively.”
Commenting on the fourth quarter closure of Petrotrin, Matthew said it ushered in a “softening of oil sector activity” as the company embarked on a restructuring exercise. But, “A concerted and aggressive push to diversify is therefore still required to minimise the vulnerability of the economy to a downturn in energy prices."
It was gratifying to realise that the Matthew-led board has continued to implement its four-year strategic plan (2016-2019) in the key areas of – cooperative government; membership engagement; employee capability; revenue growth; portfolio quality; operations quality and customer satisfaction by convening a strategic session.
This session included board and committee members, staff and members. The initiative was particularly beneficial in ensuring all stakeholders were appraised of the progress of the strategic goals and the outstanding objectives going forward.
In its report the board complemented the strategic plan by setting up focus teams to serve in a deliberate and measured way with a monthly tracking report and a quarterly report on their activities. Also, to ensure all areas of the organisation were involved, an interactive plan update and feedback session was held which allowed the credit union to benefit “from another angle of sight”.
The board report contained some interesting statistics, especially when one looks at the country’s economy. As far as its assets were concerned ASCU experienced a two per cent growth compared to 2017. Members share deposits recorded an increase of four per cent over the previous year while the total loan portfolio increased in 2018 by six per cent.
Revenue was up as gross income before expenditure showed a positive variation of 11 per cent and net surplus for the year showed a decline of 38 per cent against 2017. Expenditure however increased. “Due to extraordinary expenses arising from adherence to IFRS 9, our total expenditure was 66 per cent greater than 2017 actuals and 40 per cent above projected for 2018.” Meanwhile, membership continued to climb with new members joining for 2018 being 73 per cent higher than 2017.
As stated in the board report, IFRS 9, which caused the organisation’s expenditure to skyrocket, replaced the IAS 39 and came into effect on January 1, last year. It affected the provisioning of bad debts in advance for loans and investments.
This takes into consideration the probability that “some portion of the number of loans granted to members will not be recovered and the probability that some investment may not materialise as planned. This has the effect of negatively affecting the income statement which then impacts the quantity of dividend (if any) that can be appropriated to members at the end of the financial year.”
But in spite of the many challenges faced by ASCU, Matthew pointed out some of the organisation’s bigger achievements made throughout last year – enhancement of their customer experience by embarking on efforts to embellish its customer service delivery and refurbishment and upgrade of the union’s headquarters at Orange Grove Road, Tacarigua.
He spoke too about several technology improvement interventions made during 2018, including their new look website with improved functionality and an interface to facilitate mobile phone access. Upgrade of the system is ongoing and “it is anticipated that by the third quarter of 2019 the selection process for a provider will be completed and the implementation of the installation would be initiated”.
Another goal realised by ASCU was a job evaluation exercise and a review of the products and services offered by the credit union to better meet the needs of its membership.