Dr Fred Sukdeo, Chairman of the National Co-operative Credit Union Ltd. (NCCUL) told Stabroek Business recently that the rules of that credit union had been amended to allow school thrift societies to make deposits with it.

One of the schools which was going to take the lead in this innovation, he said, was the Leonora Primary School thrift society which was adopted by the NCCUL and had over $2.6 million in its account.

But Myrtle Richards, principal of Kuru Kuru Co-operative College says the co-operative law does not permit a school co-operative to transfer funds from its accounts to a credit union for keeping.

She contends that because a school thrift society is not a member of the NCCUL, it is not permitted to bank with that institution. "A school thrift can never be a member [of a credit union]," Richards argues, adding that a credit union is a primary society and not a secondary one. A secondary institution is the Guyana National Co-operative Credit Union League Ltd of which all co-operatives are members.

In Richards view, the only way a school cooperative can transfer funds to any credit union is if the students form a resolution that will permit this and even if this is done the resolution still has to be approved by Clive Nurse, the Chief Co-operative Development Officer (CCDO).

However, she believes that credit unions are beneficial to their members and are capable of safeguarding their depositors' money. "The best thing about the movement is this...the interest rate on loans is much less," she says.

It is also Richards' opinion that the Ministry of Labour has the monitoring capacity to ensure that large cooperatives conform to regulatory measures.

The common bond area of the NCCUL (agriculture and associated industries) she believes is quite adequate and not too large but she says everyone will have to wait and see how it will be used.

Recently, Abdul Jabar, senior regional co-operative development officer in the Ministry of Labour told Stabroek Business the NCCUL had forwarded its amended rules to the CCDO. This publication has been informed that the amended rules are still to be approved by Nurse.

Sukdeo was unavailable for further comment on the issue yesterday and co-operative authorities are yet to respond to questions faxed to them up to press time.

Mohammed Khan, headmaster of Leonora Primary School, in West Demerara had agreed to an interview at the school to discuss the issue of the transfer of that thrift's funds to the NCCU but after Stabroek Business arrived at the school the principal said it was against protocol and normal policy for him to discuss school business. He instead said the information should come from the Ministry of Education or from the Regional Education Office.

Deomatie Singh, the Regional Education Officer was in a meeting when Stabroek Business visited her office on Wednesday and was unavailable for comment. Minister of Education Dr. Henry Jeffrey was also unavailable for comment.

Kwebena Griffith, head of the Guyana Association of Bankers was asked to comment on the fact that the NCCUL was taking deposits from members of the public who were not members of NCCUL and was thus competing with commercial banks for deposits. "It is not something the association can control," Griffith said. He says the association is not concerned with the operation of the NCCUL since it did not fall under the banking association and the association is not a regulatory body.

Griffith also said "that it is not [their] decision to make" -as to whether or not credit unions should come under the Bank of Guyana's supervisory powers. "I have no idea," he said after being asked if the Ministry of Labour could adquately monitor and supervise the operations of credit unions.

Richards said to a large extent credit unions in Guyana are save and borrow organizations. In credit unions in the Caribbean, she said, members can borrow enough to buy cars, a home etc., because the credit ceiling is very high. Here, she says, the borrowing ceiling is very low and at times does not conform to the society's laws which mandate that a member can borrow up to three times of what they have deposited. If the NCCUL can change credit unions from being save and borrow institutions this would be good, she submitted.

Officials at NCCUL in previous interviews had refused to state their credit ceiling on loans and liabilities but Stabroek Business has earlier reported a loan ceiling of one million dollars. The NCCUL started last March and has since accumulated $1.3 billion in assets, $1.2 billion of which was loaned to farmers.