– Nadir blames poor management
Local credit unions have fallen on hard times and the Labour Ministry has ordered audits as part of new measures to resuscitate several of them.
Of the 48 registered credit unions in the country, only 27 are functioning. Of these 27, only 12 are properly functioning, a senior official within the Ministry of Labour told Stabroek News.
When contacted, Minister of Labour Manzoor Nadir admitted that the state of credit unions was a major concern and said that concentrated efforts were being made by the ministry to help bring them up to speed.
Nadir said the ministry recently conducted a preliminary status report on all credit unions and has identified those unions which are not functioning effectively. Investigators and auditors have been appointed to examine the problematic unions and several of them will have to report to the ministry by the end of the month.
Nadir explained that his ministry was “bombarded by members of credit unions who have been finding it difficult to access their deposits and get loans….” According to him, credit unions are only successful when they are able to promptly grant withdrawals to their members when they apply and if they are able to approve and grant loans that are properly secured.
Meanwhile, Nadir said that where the ministry finds poor performance and non-accountability as it relates to these credit unions, it will act within the law to safeguard the interest of the members. The main problem, he opined, is that these credit unions have been poorly managed.
The Credit Union of the National Association of Agricultural Commercial and Industrial Employees (NAACIE) was by several accounts severely mismanaged. After consultations between the Labour Ministry and the NAACIE leadership, a decision was taken to dissolve the credit union. This was officially done on October 13, last year, when the Acting Chief Co-operatives Development Officer Kareem-Abdul-Jabar issued a statement saying that the union had been closed under Section 38(1) of the Co-operative Societies Act, Chapter 88:01.
Over 80 employees have been affected by the union’s closure, including a significant number of sugar workers. However, NAACIE General Secretary Kenneth Joseph welcomed the decision to close the credit union and said that it was definitely in the best interest of its members.
Joseph candidly acknowledged that the NAACIE credit union was badly managed over the years. He said it was after the man who oversaw the credit union for several years died in 1999 that it was subsequently discovered that the financial records were in bad shape. He added that to his surprise, the financial accounts of the credit union were never properly audited.
When asked why NAACIE leaders did not intervene earlier, Joseph said that as a rule the union leadership never interfered with the management of the credit union. He also explained it was the members of the union who decided the management teams of the credit union. This management, he said, was directly answerable to the Co-operatives Division within the Labour Ministry. He said after the mismanagement of the credit union came to light, efforts were made to meet the members of the credit union but they were clearly not interested since they never attended the scheduled meetings.
Joseph added that while efforts were being made to see if the credit union could be resuscitated, it proved to be a herculean task and therefore he agreed that it was best to dissolve it.
When contacted, Jabar said that an inquiry into the credit union revealed that there was gross mismanagement of funds, particularly between 1995 and 2005.
He said the records of the credit union did not correspond with the small sum of money it had in the bank. Jabar said it was unfortunate that the credit union had reached this state but added that the decision to close it down was the best option at this time.
Meanwhile, the Co-ops Division has appointed Heston Rodrigues as liquidator for the credit union. A meeting is supposed to be held next month, where members are expected to receive payouts.
These payouts, however, will be small and much less than members would have contributed, this newspaper was told.