Jamaica’s credit unions proved their resilience to COVID-19 after bypassing hundreds of millions of dollars in liquidity support extended by both the Bank of Jamaica and their umbrella grouping the Jamaica Cooperative Credit Union League (JCCUL).

JCCUL Chief Executive Officer Robin Levy disclosed that from the 25 credit unions operating in Jamaica only two have applied to its Liquidity Support Fund.

Speaking at a recent Jamaica Observer Business Forum, Levy was quick to point out that the two credit unions in question, which he did not name, did not apply out of a desperate need for liquidity support “but it was a precautionary measure”.

The fund, managed by the JCCUL, is capitalised from the combined internal resources of credit unions across the island, and was created to provide liquidity to any credit union in need, arising from significant decline in loans and or cash inflows. There is a $20 million cap on draw down, but Levy emphasised that “credit unions have hardly used it”.

BOJ LIQUIDITY SUPPORT FACILITY

Levy pointed to a similar facility extended by the BOJ. According to the JCCUL CEO, “The BOJ recognises credit unions as systemically important to the financial health of the country has set up their own discount window for the first time ever to allow credit unions to also get liquidity support.” Levy states that this is historic, never happened before.

“I can report to you that it [funding] has never been used. No credit union has used it yet,” Levy asserted.

http://www.jamaicaobserver.com/business-observer/resilient-during-covid-19-credit-unions-bypass-multimillion-dollar-covid-19-liquidity-support_200114