The National Co-operative Credit Union Limited (NCCUL) has been instructed by the Chief Co-operative Development Officer (CCDO) Clive Nurse to amend its rules to restrict membership to workers in agriculture or associated industries.

Abdul Jabar, senior regional co-operative development officer in the Ministry of Labour, says the credit union has already forwarded its amended rules to the CCDO, but he was not in a position to say if the amended rules have been approved.

The NCCUL, established in March of 2003, was promoting itself as a credit union operating across the country with no restriction on its "common bond" or membership and it was felt that the operation was just a backdoor entry into the banking sector. A concerned senior government functionary had indicated last year that if it were found that the NCCU was not operating within the spirit and intent of the Guyana Co-operative Societies Act, it would be stopped.

Jabar says it was found that the rules of the association were contrary to the spirit of the law and two options were available; suspend the rules or have them amended. The co-operative unit chose to request an amendment.

Jabar says the credit union has also been sanctioned for granting loans to rice-farmers who did not qualify because their membership periods were under six months, but he could not say what form the sanction took and excused himself from the telephone interview.
GuyFlag officials signing up teachers for the $30 million life and accident insurance coverage last Friday.

But while the credit union continues to come under the microscope of the ministry, last Friday, it rounded up some 200 teachers, students and community residents of Region Three at its Ruim-zeight Garden headquarters to lecture them on the importance and benefits of school co-operatives.

The seminar by the NCCU was supported by the Kuru Kuru Co-operative College and the West Demerara/East Bank Essequibo and Islands Chamber of Commerce and Industry Inc of which Trea-surer and spokesman for the NCCU, Joshua Safeek, is the president.

"I will like to see each of the schools [in the region] have a co-operative. We have seen children finish school and can't go on to university [because] of lack of finance. We are trying to open their eyes to see [that co-operatives are] the way forward," Safeek, who is also chief executive officer of the Guyana Fire, Life and General Insurance Company (GuyFlag), told his audience.

And GuyFlag's President Anthony Soares, also pledged to provided an estimated 300 teachers in that Region with life and accident policies worth $100,000 each, a total package of $30 million to foster greater awareness about insurance in the community. Soares says GuyFlag will pay the premiums in the first year and teachers will be required to pay $60 per month from the following year.

Maria van Beek, commissioner of insurance, could not comment on this "unusual" occurrence until she sees the terms and conditions of the policy.

School thrift plans

The NCCUL also presented schoolchildren in Region Three with 5,000 personal thrift books with $100 inside, complements of the Chamber. Leonora Primary received 800 books.

Education Minister Dr Henry Jeffrey was a presenter at the seminar and he cautioned participants to not only save their money but to manage their funds wisely. Myrtle Richards, the principal of Kuru Kuru Co-operative College said she was happy that a seminar of this nature was being held. She hoped that the seminar would encourage teachers in Region Three schools to become trained in the art of school co-operatives. Only five of the approximately 60 schools in the region have teachers trained by the college and Richards says Guyana, which started school co-operatives had her Caribbean counterparts come here for training.

Antonio Hiralall, 11, of Two Brothers Primary School told Stabroek Business that the money he saved in his schools' thrift plan will help him purchase certain items in preparation for entry into a secondary school. Hiralall, who is in fourth standard, has already withdrawn his savings of $84,000.

Two Brothers Primary has 189 students but only 19 of them are a part of the school's thrift society.

Another of the region's schools, Leonora Primary, reported at the seminar that it had 315 students in its thrift plan but only 21% of the students were active participants. The school's thrift plan is worth over $2.6 million.

Richards implored the teachers to make Region Two their example as some schools had 100% participation in thrift plans. The region also has two nursery schools that have piggy banks and is the leading region of school participation in school co-operatives.

NCCUL

Fred Sukdeo, NCCUL's chairman boasts that the credit union has made remarkable strides. He argues that had it not been for the NCCUL some rice-farmers in Region Three over the last three crops would have faced serious difficulties. Rice cultivation, he says, increased by 25% along with production and the farmers' net income also increased as a result of NCCUL.

Safeek adds that there are different plans for members including a children's plan and a retirement plan. There is no such provision in the existing rules and it is not sure whether the amended rules cater for this.

Safeek says the NCCUL is exploring options to accept contributions from other co-operatives which do not have an agricultural base.

At the moment, NCCUL is allowed to take contributions from any individual but is restricted to granting loans only to persons in the agricultural or related industries.

NCCUL boasts that it has 1,000 members and accumulated assets of $1.3 billion of which $1.2 billion was loaned to farmers.

Safeek would not say who the auditors of the credit union were nor would he say what was the maximum ceiling on loans and liabilities. Stabroek Business had earlier reported a loan ceiling of $1 million.

The Ministry of Labour, Human Services and Social Security appoints auditors to audit the various co-operatives and Safeek expects that at the end of the co-operatives fiscal year in March, an auditor would be assigned.

"Basically all this credit union is doing is helping people. Poor people are being helped," Safeek told Stabroek Business. He insists that it is the banking community which is uneasy about what the union is doing.

Last year the NCCUL came under a lot of pressure because it was taking deposits from the public and not sticking to a 'common bond area'. However, the credit union has been relatively low key in its operations in recent months having started off by soliciting deposits across the country and offering between four per cent and eight per cent interest.

Its rules prohibit interest higher than six per cent. It had also claimed to offer deposit insurance but failed to produce the policy to Stabroek Business for an inspection and has held itself out to be a cheaper source of credit to the public.

The NCCUL, it was also discovered, had been advancing cash to farmers and accepting 90-day post-dated cheques from farmers as collateral when this is not permitted by its rules.

In effect, the credit union had been encashing farmers' post-dated cheques at a 3% discount. Safeek had said that the credit union had a lien on rice being shipped abroad to facilitate these post-dated transactions.

As of September, 2003 NCCUL claimed it had $350 million in deposits of which $250 million was from the public.