Town to bank on Bendigo
Community ownership preferred
Berrigan is expected to continue having access to banking services in the town.
Investigations have begun into establishing a Bendigo Community Bank branch, following a public meeting held last Wednesday.
Bendigo Bank has committed to providing a temporary banking agency while negotiations take place.
It will replace the National Australia Bank branch, the only bank in Berrigan, which announced in April it will close on July 7.
Berrigan Community Bank Steering Committee member Rob Clark said the end goal now was to have a banking branch owned by the community.
But he said it would only work if there was support from locals in the establishment process.
‘‘There will be a need for community investment in the establishment of the branch, which must also satisfy commercial targets before it can be pursued.
‘‘Last week’s meeting was made aware that for a Bendigo Bank to be viable locals will have to, over time, establish a banking relationship with the Bendigo Bank,’’ Mr Clark said.
‘‘Those at the meeting accepted that, and I am pleased to say that by a show of hands a unanimous decision was reached in support of the motion (to form the community bank).
‘‘Ninety people attended, which is greater than 10 per cent of the town’s adult population. A show of hands was called for with about 75 per cent of the attendees indicating they currently bank with the NAB.
‘‘A community bank under the auspices of the Bendigo Bank is in effect a community owned and operated franchise, that operates under the Bendigo Bank banking licence.’’
Mr Clark said there was still a lot of work to be done before the new banking service could be secured. It will include feasibility studies and securing shareholder customers to fund the branch.
Mr Clark said before the feasibility stage can begin, Bendigo Bank will seek a pledge from community members in becoming shareholders.
‘‘The pledge stage is the opportunity for the local community members to indicate their willingness to be a future shareholder and or customer,’’ Mr Clark said.
‘‘Without sufficient community support the branch will not go ahead. There is the critical need for the agri sector and commercial businesses to come on board and be part of the community’s goal of maintaining banking services in Berrigan and surrounds through a local community bank.
‘‘Once the community has pledged their support, community members will receive a survey which helps the local committee determine if there is enough banking business available to ensure the viability of a Community Bank branch.’’
Mr Clark said if the feasibility study shows positive results, community members will then be asked to invest by purchasing shares in the local company.
‘‘Shares would have a value of $1 and be purchased in bundles of about 500, up to about 10,000 shares. No one entity can hold any more than 10 per cent of the capital.
‘‘Profits from the enterprise are split 50:50 with Bendigo Bank, and the local profit is split as 20 per cent as dividends to the shareholders and 80 per cent directed to community projects as determined by the board of directors.
‘‘As in any investment there is the risk that the value of the issued share may rise or fall depending on the profitability of the local Community Bank.’’
It is anticipated the branch would be staffed by a manager with expertise in agricultural and business loans, who is supported by local tellers.
The other option explored by the initial action group that was formed following the NAB announcement was a partnership with the Central Murray Credit Union, but Mr Clark said Bendigo Bank’s community model was more enticing.