What is a Credit Union?

A credit union is a financial institution, organized by a group of people to save money and make loans to each other at favourable rates of interest.  Credit union members usually have something in common such as their place of work, area of residence, professional organization or social group.  A credit union operates on the basis of mutual self-help, hence credit unions typically serve only their members.

Benefits of Credit Union Membership

As a credit union member,

• You become part owner of a financial institution.
  
  

• You are entitled to exercise your democratic right by casting your vote at elections or being elected to any one of the committees that run the organization.
  
  

• You can access credit in the form of loans at the lowest known rates around.
  
  

• You are entitled to income tax deductions based on your savings made with the credit union during each year up to a maximum of $3,000 per annum.
  
  

• When you borrow from a credit union, your savings remain intact so that while you pay your loan, your savings continue to grow.  We call this "wealth creation".
  
  

• You have the convenience of saving by payroll deduction.
  
  

• Your savings are entitled to Life Savings benefits up to a maximum of $25,000, so that in the event of your death, your beneficiaries will receive your savings as well as other benefits up to $25,000 based on your savings.  If death is by accident, this benefit would be double.  Plus, a funeral benefit to a maximum of $3,000 in the event of death, based on your savings.
  
  

• Your family/beneficiary is protected against hardship in the event of death, through the Loan Protection benefits, up to a maximum of $100,000.  The loan of a deceased member is automatically written off up to a maximum stated.
  
  

• In the event of temporary disability, e.g. sprain/broken limbs, the loan is repaid for you for three months up to a maximum of $3,000.
  
  

• You have the opportunity for personal development by attending and participating in the varied and informative courses, conventions and seminars organized locally, regionally and internationally.
  
  

• You have the benefit of exposure to the world of business by becoming involved in the management/supervisory/credit committees of your credit union.
  
  

• Finally, you become one of the millions of persons around the world who participate in this great Movement of Social and Economic Justice.

Back to top

Credit Union Operating Principles

Democratic Structure

Open and Voluntary Membership
Membership in a credit union is voluntary and open to all within the accepted common bond of association that can make use of its services and are willing to accept the corresponding responsibilities.

Democratic Control
Credit union members enjoy equal rights to vote (one member, one vote) and participate in decisions affecting the credit union, without regard to the amount of savings or deposits or the volume of business. Voting in credit union support organizations or associations may be proportional or representational, in keeping with democratic principles. The credit union is autonomous, within the framework of law and regulation, recognizing the credit union as a cooperative enterprise serving and controlled by its members. Credit union elected offices are voluntary in nature and incumbents should not receive a salary. However, credit unions may reimburse legitimate expenses incurred by elected officials.

Non-Discrimination
Credit unions are non-discriminatory in relation to race, nationality, sex, religion, and politics.

Service to Members

Service to Members
Credit union services are directed to improve the economic and social well-being of all members.

Distribution to Members
To encourage thrift through savings and thus to provide loans and other services, a fair rate of interest is paid on savings and deposits, within the capability of the credit union. The surplus arising out of the operations of the credit union after ensuring appropriate reserve levels and after payment of limited dividends on permanent equity capital where it exists, belongs to and benefits all members with no member or group of members benefiting to the detriment of others. This surplus may be distributed among members in proportions to their transactions with the credit union as interest or patronage refunds, or directed to improved or additional services required by the members.

Building Financial Stability
A prime concern of the credit union is to build the financial strength, including adequate reserves and internal controls that will ensure continued service to membership.

Social Goals

On-Going Education
Credit unions actively promote the education of their members, officers, and employees, along with the public in general, in the economic, social, democratic, and mutual self-help principles of credit unions. The promotion of thrift and the wise use of credit, as well as education on the rights and responsibilities of members, are essential to the dual social and economic character of credit unions in serving member needs.

Cooperation Among Cooperatives
In keeping with their philosophy and the pooling practices of cooperatives, credit unions within their capability actively cooperate with other credit unions, cooperatives and their associations at local, national, and international levels in order to best serve the interests of their members and their communities.

Social Responsibility
Continuing the ideals and beliefs of the cooperative pioneers, credit unions seek to bring about human and social development. Their vision of social justice extends both to the individual members and to the larger community in which they work and reside. The credit union ideal is to extend service to all who need and can use it. Every person is either a member or a potential member and appropriately part of the credit union sphere of interest and concern. Decisions should be taken with full regard for the interest of the broader community within which the credit union and its members reside.

These Credit Union Operating Principles are founded in the philosophy of cooperation and its central values of equality, equity, and mutual self-help. Recognizing the varied practices in the implementation of credit union philosophy around the world, at the heart of these principles is the concept of human development and the brotherhood of man expressed through people working together to achieve a better life for themselves and their community.

Frequently Asked Questions

Q.  How old must I be to become a credit union member?

Ans. You must be at least 16 years of age.  Deposits can, however, be accepted from persons under the age of 16 years.


Q.  Can I borrow immediately after I become a member of a credit union?

Ans.  This is determined by the lending policy of the credit union of which you are a member.
 

Q.  How much can I borrow from a credit union?

Ans.  It depends on the lending policy of your credit union.
 

Q.  Why must I give collateral when I want a loan?

Ans.  Collateral is required only when you are borrowing more than you have in shares or savings in your credit union.  It is used as security against delinquency. Remember, when you borrow more than you have in your account, you are really using other members' savings.  The credit union has to secure their savings.


Q.  Can I withdraw my savings while I am repaying my loan?

Ans.  Only savings that have not been used as security for a loan can be withdrawn.

Q.  What happens if I die before my loan is repaid?

Ans.  Your loans up to an amount which is determined by your credit union, are insured, therefore if you die before you have repaid your loan it will be repaid by insurance.  (Conditions apply).
 

Q.  Can I join any credit union in Barbados?

Ans.  Membership in a credit union is normally determined by workplace, geographical location , social or professional group.  Each credit union specifies who is entitled to join in its charter.
 

Q.  How large is the credit union family?

Ans.  Worldwide there are in excess of 100 million credit union members.

Back to top

How to Join a Credit Union

Becoming a member of a credit union is simple:

1. Complete the application form.

2. Visit your chosen credit union to sign the completed form and deposit the required entrance fee.

3. Submit the required identification.

4. Purchase the minimum number of shares required.

Back to top