Reports reaching Amandala are that more than a month after being put under the administration of the Belize Credit Union League (BCUL) and putting a hold on members’ withdrawal from their savings, the Mount Carmel Credit Union (MCCU), based in the town of Benque Viejo del Carmen, Cayo District, and established in 1958, remains in a precarious financial position, having to put on hold requests by some of its more than 2,500 members to withdraw their savings.
MCCU officials have said that they wish to secure the savings deposits in the credit union and restore its position as one of the strongest financial institutions in Belize. The regular annual financial audit was to have begun about a month ago, but the financial picture remains a closely guarded secret.
Today, Amandala sought comment from all concerned. When we contacted the credit union’s offices, we were told that its manager was in a meeting. We left a message for her, but she is yet to return our call.
The Central Bank of Belize, which is responsible for credit union operations, referred us to the BCUL, but their person in charge was also in a meeting, and unavailable.
However, BCUL executive director Corine Fuller sent us a formal statement by the League this evening, which describes Mount Carmel’s situation as “serious and troubling,” with “no easy fix.”
Mount Carmel’s problems began in 2001, when three of its officials were charged with the embezzlement of over $500,000 from the credit union’s accounts. That case was subsequently dropped, but MCCU spent much of the next five years in administration after the Union’s Board of Directors and Supervisory and Credit Committees were suspended by the Registrar of Cooperatives, who installed an Oversight Committee to manage the credit union; they were eventually joined by a president and supervisory committee chair.
The League itself took over administration for six months in the first instance in 2006 to prepare staff and volunteers to take over by July 2007, by means of a management team comprised of officials from other League members.
It was able to negotiate principal-only payments on a loan of over $700,000 with an unidentified creditor who is the credit union’s largest, among others, and set up a system to collect on delinquent loans and train employees.
Despite being under its own management since then, according to the League, the credit union “has not recovered,” and last December’s burglary in which over $25,000 was taken (though reports at the time suggested over $40,000 in cash and cheques was stolen), along with continued delinquency in the loans portfolio, has caused a “severe liquidity crisis”, making MCCU unable to pay creditors, provide loans to members and meet requests for share withdrawals and account closures.
“To address the situation,” the League explains in its statement, “a new manager [Virginia Vasquez] was hired earlier in the year, a membership meeting was convened on April 2, 2011 to advise members of the situation, delinquent accounts are being managed more aggressively, and new income earning services are being sought, while at the same time measures are being put in place to cut operating expenses even further.
“Also, an Advisory Committee made up of managers from two credit unions, three Mount Carmel members and the executive director of the League, was established to guide the recovery process.”
The League concludes by calling for patience, stating, “We need to work as a team to give recovery a chance. All shares deposited into the credit union since November 1, 2010, are protected from loss, so members are asked to continue saving. Members should repay their loans so that the credit union can improve its ability to meet its obligations, and attend membership meetings when called to remain informed about the situation.”