A recurring theme at the annual general meeting of the Holy Redeemer Credit Union, which held its annual general meeting on April 29th, was the growing tendency towards delinquency in paying back credit union loans.

HRCU, like all other credit unions, charge one percent interest per month on the reduced balance. If a borrower pays regularly according to promise however, the interest comes out to 7 1/2 percent a year.

Seven and a half percent is less than what some commercial banks are asking, but some have been using the one-percent-a-month standard to persuade clients to keep their savings in the credit union but to borrow instead from the bank.
This is an unfair business practice because it does not reflect the whole truth, and it leaves the credit union paying out more than the bank interest on savings without getting the interest it could earn from loans.

HRCU’s five percent interest on savings is more than any other lending institution in the country is willing to offer. So many members prefer to pool all their savings with HRCU, where they earn more. But when they need a loan, they go to the bank. They do this because they believe they are getting a better deal on the interest.
This has become a problem, President Fred Smith told the annual general meeting. Credit unions need to earn income, and the income they earn is by making loans. If credit unions do not make loans, they do not earn an income.

Fortunately Holy Redeemer Credit Union has been doing well. Last year it had an 8.1 percent growth and made a gross profit of $39.2 million. But delinquency has also grown, and is now at 13.8 percent, the highest it has ever been!

HRCU is looking for ways to invest its surplus money safely, and is now investing in a housing project at Mile 15 (northern) where it intends to build three bedroom homes for middle-income families who can afford them.

This is a great deal because new home-owners will get the land, high elevation pine-ridge, well drained, and the home in a housing estate that is well run, at a reasonable cost, and only 15 miles away from Belize City.

This is the first time that HRCU will venture into a housing estate.
It is a progressive and wholesome plan,and we have every confidence that HRCU with its experienced management team will make it a great success!

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