THE Reserve Bank of Fiji says the proposed Credit Union Bill 2016 was constructed to ensure the protection of credit union members and also to ensure the long-term sustainability of credit unions themselves.
RBF governor Barry Whiteside said it was important to note that purpose of credit unions was not only to lend to its members but also to encourage savings.
“In undertaking its lending activity, credit unions must ensure that it provides this service in a sustainable manner for the benefit of the members and the credit union,” he said.
“In this regard, the draft Bill proposes a sustainable framework for members, the credit unions and the financial system.”
He made the statement in response to comments made by Fiji Trades Union Congress general secretary Felix Anthony earlier this year about the proposed Bill.
In an article which appeared in this newspaper on July 19, Mr Anthony claimed the Bill, if passed, would make it difficult for ordinary workers to access loans from credit unions because of the stringent requirements of the RBF. He also said because of the administrative requirements of the Bill, many medium and small credit unions could be forced to fold.
Mr Anthony further claimed that ordinary workers who did not meet the requirements by commercial banks for loans had found access to funds through credit unions – and the Bill would remove this facility from them.
Mr Whiteside said the draft Bill was designed to ensure there was accountability on the part of credit unions to their members.
“The intention of the draft Bill together with the oversight of the Reserve Bank, is to instil confidence in the industry and the public as we bring the credit unions into the mainstream financial system.
“The end result is ordinary workers having the assurance that their deposits will be safeguarded, and the confidence that loans will be made available under a properly defined framework.”
