Some credit union members in Barbados are falling into debt traps after being enticed by credit lending institutions.
A number of them also continue to stash their money away in accounts at commercial banks despite earning “alarmingly low” interest rates.
Both of these issues have been flagged by credit union veteran Ronald Jones who believes it suggests that “a degree of mistrust toward credit unions” is persisting.
Jones, a former Minister of Education and former teacher, raised his concerns in the 2024-2025 annual report of the Barbados Teachers’ Co-operative Credit Union Limited (BTCCUL), which he led as president in the period ended March 31.
“We are witnessing the growing presence of credit lending institutions, many of which employ persuasive marketing tactics that conceal exorbitant interest rates,” he asserted.
“Unfortunately, some of our members are being drawn in, only to find themselves trapped in a dangerous cycle of debt. With limited financial literacy, they borrow from Peter to pay Paul, and before long, their financial footing becomes even more precarious.”
Jones continued: “At the same time, we see a troubling paradox: individuals with surplus resources continue to deposit them in commercial banks, earning alarmingly low interest rates or, more recently, none at all.
“Yet, these same resources could yield far greater returns if placed with credit unions, institutions they own and control.
“It suggests that, despite our many efforts, a degree of mistrust toward credit unions persists. We must overcome this hurdle.
“Trust is the foundation of any cooperative movement, and rebuilding that trust
through transparency, education, and engagement must be a central part of our future mission,” he added.
Jones noted that BTCCUL’s vision “goes beyond profits and bottom lines empowering every member to achieve their goals”.
“Whether it’s owning a home, educating a child, starting a business, or preparing for retirement, we believe financial success should not be a privilege, but a possibility for all,” he said.
“That is why we continue to develop services that reflect your needs – tailored loans, flexible savings plans, investment advice, and insurance options that support you at every stage of life.
“When one member succeeds, we all benefit. Credit unions belong to their members. The profits generated by these institutions do not line the pockets of outside shareholders – they are returned to members in the form of dividends, patronage refunds, and collective equity,” he stated.
“In contrast, banks exist to serve their owners and shareholders. Their profits are distributed among a small group, offering only limited benefits to the everyday customer,” Jones argued.
(SC)
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