Credit Unions: ‘The sharpest cutting edge against poverty’

At a time when the global target of ending poverty is running out, earnings dropping or stagnating and prices of basic commodities on a free rise, the Gambia Teachers Union (GTU) believes that Credit Unions are the most progressive tool to fight poverty.

During its 14^th General Assembly held at St. Therese’s Upper Basic School, Kanifing Municipality, on April 23, 2011, the Gambia Teachers Union Co-operative Credit Union (GTUCCU) adopted the theme “Credit Unions: the sharpest cutting edge against poverty”.

According to the Board Chairman of GTUCCU, Edrissa Bojang, fifteen years of challenging circumstances strengthened their desire and determination to tackle head-on the menace of poverty.

He argued that global efforts directed towards reducing or eliminating poverty has affected the lives of the poor, however, nothing is as effective in reducing poverty as credit unions do.

He added that micro credit finance is a catalyst in enhancing spending power, though it is dependant and determines one’s level of savings; it adds another dimension to the fight against poverty by consolidating one’s assets and thus preparing them for eventualities.

15 years in the life of a credit union is long enough to highlight weaknesses and inadequacies and measures put in place to address them. And Mr. Bojang admitted that it is against this background that the Board at a recent meeting concluded that the mistakes made during the inception must be rectified.

“We wasted a lot of opportunities presented to this union which set us aback, but I hope we can muster the courage to put the past behind us by trusting new dimensions,” he said.

“As a financial cooperative, owned, managed and controlled by members, we must continue to emphasise that we are unique, not-for-profit and not a charity. We are expected to provide more flexible, convenient and reasonably priced financial and non-financial services to the members,” Mr. Baboucarr Jeng, the General Manager of the National Association of Cooperative Credit Unions in The Gambia (NACCUG) said.

Mr. Jeng said many poor people in the country including the most disadvantaged areas continue to access financial services through the credit union system, increasing income levels and reducing vulnerability to external shocks.

According to him, credit unions empowers the poor and the marginalized by moving them from everyday survival to planning for the future through savings mobilization and the giving out of loans.

Mr. Siaka Bah, a representative of the Central Bank of The Gambia (CBG) noted that credit unions forms an integral part of microfinance sub-sector of The Gambia, increasing financial access to low income earners.

On the contrary, he said limited access to finance lowers social welfare and hinders poverty reduction efforts as well as the emergence of an economically active middle class.

He said: “Evidence shows that banks and microfinance institutions complement each other, thus contributing positively to financial deepening and wealth creation.”

Nonetheless, he said for improved performance and sustainability, microfinance players need an appropriate legal and policy framework for an orderly growth and development of the sub-sector.   

It is in this regard that the CBG as a regulatory body reviewed the microfinance regulatory guidelines and drafted a Bill aimed at transforming the sector for improved services and better management, he said.