At the very genesis of the credit union movement in Jamaica and elsewhere is a need to have a system in place which can assist the poor and the most vulnerable in society.

Spurred by the 1938 mass riots against poor wages and inhumane working conditions, Father John Peter Sullivan and the Catholic Young Men’s Sodality (CYMS) decided to form a credit union, which would assist in relieving the myriad of social problems. On September 12, 1941, they pooled together their shares, giving birth to Jamaica’s first credit union; the Sodality Credit Union. This credit union operated under the motto, ‘Not for charity, not for profit but for service.”

Credit unions were subsequently formed for rum workers, barmaids, policemen, store clerks, factory workers and civil servants.  While the scope of the Credit Union has morphed and expanded since those early years, credit unions at heart are a means of uplifting and inspiring people to achieve.

A credit union is a co-operative financial institution, which is owned and controlled by its members. They exist to provide a safe, convenient place for members to save money and obtain loans and other financial services at competitive rates. Members of credit unions may share a common bond, such as their occupation, where they live or attend church.

The Jamaica Co-operative Credit Union League Ltd. is the National Association of Credit Unions with responsibility for the overall direction and co-ordination of the National Credit Union Movement. According to the JCCUL, as at June 2011, the Credit Union in Jamaica had a membership of 900,000, assets of $62 billion, savings of 49 billions and loans of $38 billion.

Credit Unions offer a wealth of services such as savings, insurance and loans. Some offer additional services such as money management or financial counseling, standing order services, remittance services and Easi Access ATM and debit point of sale service, which also includes access to withdrawal services, deposits, account enquires, transfers and loan repayment.

For a small and medium enterprise, these are all useful and even necessary services. However, access to affordable, easy to obtain, convenient small business loans is probably one of the most accessed credit union service by entrepreneurs and prospective entrepreneurs.

With a credit union, a small business owner may start a business or expand an existing one.  He or she may also secure a loan to create working capital to buy equipment or inventory.  Some of the basic requirements to obtain a small business loan include: a viable business plan; at least one third equity in the business and security or collateral for the loan.

The loan terms and options differ from institution to institution. For example the St. Catherine Co-operative Credit Union (SCCU) offers what it calls the Micro Business Loan and the Micro Power Loan.  The Micro Business Loan is geared towards start up business that may need small but accessible capital. It is a secured loan on which access to the loan is based on the amount in savings and collateral. The maximum loan amount is $80,000.00 and $40,000.00 for first time borrowers. The maximum repayment period is 36 months/3 years.

The Micro Power Loan is an unsecured loan facility available to persons with existing or expanding businesses.  The maximum loan amount is $200,000.00 with a repayment period set at six to twelve months.

Other well known credit unions in Jamaica include the Churches Co-operative Credit Union, AAMM Co-operative Credit Union Ltd, The Jamaica Teachers’ Association Co-operative Credit Union Ltd and COK Sodality Co-operative Credit Union Ltd.

The Credit Union Movement is Jamaica is firmly entrenched as a safe and secure source of capital that rivals banks for trust and reliability. They have endeared themselves to not only small businesses but middle income earners looking for saving and loan options.

For more read our special July 2012 Digital issue of Businessuite Magazine on this website