BANKS

are extremely fierce competitors of both regular private commercial banks and public savings institutions.

Jamaican credit unions should be allowed and encouraged to broaden their membership base. Commercial lending could be handled through the federation if a base co-operative is not comfortable with this type of business.

With banking licences for both JN and VMBS, and possibly some cooperation down the road, and with a Raiffeisen-style credit cooperative system consisting of credit unions, Jamaica would have two different banking cooperative systems like, for example, Italy and other countries in continental Europe.

They would compete with each other and with private banks.

Private households using banking services can currently take advantage of better prices by switching to JN, VMBS or a credit union. In order to develop this country, businesses also need access to co-operative financial services.

Today, private commercial banks hardly finance any type of real investments in domestic enterprises.

Lending to Jamaican manufacturers accounts for 1.3 per cent of total loans and debt instruments at NCB. A high-ranking manager of this institution reminded us at a UWI event that his responsibility is to maximise profits for shareholders, not to support economic development of their nation and community.

He was right. They don’t. But credit cooperatives and building societies do have this higher goal. In order to fulfil it, to develop the country, the communities, the businesses, and to grow employment, these financial organisations must have full commercial banking licences.

No doubt the Jamaican economy could benefit enormously from empowered financial co-operatives. If our private banks are not interested in financing productive investments in this country, let others do it.