Overview of Credit Unions - WordPress.com...OVERVIEW OF CREDIT UNIONS • Prior to Liberia’s Civil...

LCUNA PRESENTATION

ACCRA, GHANA

7/3/2012 LCUNA needs an urgent assistance today 1

Overview of Credit Unions

Liberia Credit Union National Association

(LCUNA)


OVERVIEW OF CREDIT UNIONS

• Prior to Liberia’s Civil War and up to 1989, Liberia Credit Union National

Association (LCUNA) registered more than 68 (sixty eight) primary credit unions

with an Individual Combined Membership of 170,000 (One hundred and seventy

thousand).

• A General survey of the credit union movement of Liberia dates back to 1966 when

the First credit union (cooperative) was established by a Catholic Priest with his

church and community members in Pleebo, Maryland County. This mission was

consistent with Liberia’s Cooperative law of 1936. The vision of Rev. Fr. Ted

Hayden was widely embraced around the country. In 1969, LCUNA was

established and in 1973, the Liberia Credit Union National Association (LCUNA) an

Apex Body of Credit Unions was accredited by the then Marketing Department of

the Ministry of Agriculture with a specific mandate to monitor and evaluate the

activities of Primary Credit Unions.


• The Generally Accepted Leadership and good governance of

(regular) Credit Unions is Democratic. Presently, there seems to be

an unknown number of standard (regular) credit unions but there is a

proliferation of approximately 125 credit unions with 16,716 individual

combined members according to a statistical report from a combined

assessment of credit unions undertaken by WOCCU, LCUNA and

Central Bank of Liberia (CBL) in January, 2012.

• Consistently, the Cooperative Development Agency (CDA) is

responsible for the regulatory supervision of credit unions. But an Act

of legislature since 1999 has begun to usher a slow transition to

transfer the regulatory supervision of credit unions to the Central

Bank of Liberia (CBL) as the Government understands from time to

time that credit unions are in fact financial institutions operating as

Cooperative societies.


• The Liberian Civil War of 1989 severely devastated the credit union movement and left the economy in ruins. Upon resumption, most credit unions began to operate in an open bond in order to regain membership and Financial Empowerment. The only closed Bond societies are the employer based credit unions and some women’s groups.

• Presently LCUNA, CDA, CBL, and other stakeholders are working frantically to identify, regularize, and modernize primary credit unions to constitute the full membership of the credit union Movement of Liberia.


OVERVIEW OF LCUNA

As mentioned above, LCUNA had a membership of

68 Primary Credit Unions in pre-war Liberia and

an individual membership population of 170,000

around the country. Her leadership comprised of

nine (9) Board members elected bi-annually by

chairmen or chairpersons of Primary Credit Unions

in a General Assembly of delegates held every two

years at an appropriate location.


• LCUNA like other entities was severely affected by the war. She suffered from grave consequences that forced her members to become dormant. The post war managements of LCUNA before US were not very active due to lack of initiative and technical support. There were no tractable due payments by Primary Credit Unions and their individual members. There were no formal programs undertaken to regenerate the credit union movement. There were no formal elections of the Board of Directors to steer the affairs of LCUNA with a management team. LCUNA’s assets of two buildings mainly her headquarters in Paynesville and the Guest House at A.B. Tolbert Road were vandalized and left in a state of disrepair with little or no management control or vision to revamp.


LCUNA’S PAST


LCUNA remained in this situation until March 2010 when the

Registrar of the Cooperative Development Agency (CDA)

commissioned us into a nine-member steering committee to develop

strategies that will regenerate the credit union movement especially

the revitalization and modernization of LCUNA and the Primary Credit

Unions.

From June 16-17, 2011, we mobilized 23 credit unions and 41

delegates from Nimba, Bong, Lofa, Grand Gedeh, River Gee and

Maryland counties to a workshop held in Ganta, Nimba County. Also

in attendance were representatives of Central Bank of Liberia (CBL),

Liberia Inclusive Finance Sector, (LIFS), CDA, LCUNA, and WOCCU

as facilitators, and women’s groups were also represented.

At this workshop, a Resolution was concluded to

establish a follow up committee of seven (7)

members consisting of Central Bank of Liberia

(CBL), Liberia Inclusive Finance Sector

(LIFS), Help Yourself Credit Union, Zorzor

Credit Union, LCUNA, CDA, and Ministry of

Gender.


LCUNA PRESENT

The Technical Committee was mandated to:

1. Drive and monitor the implementation of the

conclusion and recommendations of the workshop.

2. Strengthen the visibility and Image of credit unions

in Liberia;

3. Develop and submit proposals to interested funder

to pilot the revitalization programs of credit unions

in selected counties where the potentials of credit

unions are proven.


• The first technical meeting was held to establish a secretariat of the

Technical Committee. The second meeting was held as an

awareness forum to share the outcome and impact of the 12th

SACCA/ACCOSCA Congress in Accra, Ghana from October 1-7,

2011. The third Committee meeting was held to discuss and

conclude the program for the First Post-war General Assembly to

adopt a Revised Constitution and elect a New Board of Directors

after almost 22 years.

• The celebration of International year of Cooperatives IYC 2012 was

also deliberated and a committee to collaborate with the Cooperative

Development Agency (CDA) was slated to be constituted later on.

Liberia was represented at the SACCA/ACCOSCA 2011 by Richard

T.K. Phocole (LCUNA), Alphonso Z. Kroma (LCUNA) and A. Tefleh

Wollor (CBL).


• They interacted with key members of ACCOSCA to include the Executive Director and six (6) Board members, the international organizations represented and prominent individuals especially Mr. Emmanuel Darko of CUA Ghana. These contacts resulted to the response of the Irish League of Credit Unions International Development Foundation to usher LCUNA to the “West African Credit Union against Poverty Program,” which has also facilitated our presence at this forum.

• LCUNA is presently in the process of renewing membership with WOCCU by initially registering as Associate member which will be confirmed in July in Poland and also with ACCOSCA between now and July, 2012. A General Assembly on May 1-2, 2012 in Zwedru, Grand Gedeh County elected the following members of the Board of Directors:


No Name Region Contact Number

1 Anthony M. Karbor (Member) 4 (231) 886 908027

2 James F. Fallah (Chaplain) 2 (231) 886 606379

3 Doris J. Matadi (Treasurer) 4 (231) 886 934025

4 Saye J. Biye (Chairman) 1 (231) 886521996

5 Semeh Roberts (Vice Chairman) 2 (231) 886933938

6 Ellen Tennih (Adm. Finance) 1 (231) 886517639

7 Yarkpazuo Gbusiwoi (Program) 3 (231) 886597949

8 Olando K. Zawolo (Member) 3 (231) 886417746

9 Amos Suah (Member) 3 (231) 886 848752

10 Richard T.K. Phocole (Secretary)/Ex-officio 1 (231) 886516073


• On July 19, 2011, Central Bank of Liberia (CBL) issued Regulatory Order No. CBL/RSD/005/2011 that placed Credit Unions under supervision of CBL (as cooperatives);

• The administrative and technical operations of LCUNA are principally funded by stakeholders, donors and development partners in collaboration with Internal Resource Mobilization and income generated from Affiliate Primary Credit Unions in Annual Due Payments, levies, issuance of Affiliation Certificates, etc. The budget of LCUNA has four components namely; Salaries, Travel Expenses (Local and Foreign), Educational Workshops/Training/Conferences (Internal or External). The Administration and Finance Department, Program and Planning Departments of LCUNA constituted by the General Assembly comprise of the following:


1. General Management presently headed by

Richard T.K. Phocole as Acting Managing

Director;

2. Administration/Finance Department presently

headed by J. Randall Farngalo as Acting

Director;

3. Program/Planning Department presently

headed by Alphonso Z. Kroma as Acting

Director;


• The Liberia Inclusive Finance Sector (LIFS) which constitutes UNDP-UNCDF, Catholic Relief Services are the main donors and development partners for credit unions. The Central Bank of Liberia (CBL) is the supervisory authority in collaboration with the Cooperative Development Agency (CDA) as regulatory authority that is still responsible for certification of credit unions consistent with the cooperative law of 1936.

• It was most unfortunate that LCUNA was unable to attend two of ACCOSCA’s scheduled Training Workshops in Botswana, March 21-23 and in Nairobi June 12-15 for Training in Regulatory Procedures. LCUNA was invited to both training workshops.


DESCRIPTION OF REGULATORY ENVIRONMENT

Background:

• Liberia’s Credit Union Movement has been active since 1973 when LCUNA was certificated by the Marketing Department of the Ministry of Agriculture.

• In 1981, the then military government of the People’s Redemption Council (PRC) passed a decree under the cooperative law of 1936 and established the Cooperative Development Agency (CDA) as an Autonomous Regulatory Agency for cooperative organizations and credit unions to be headed by a Registrar General. The CDA had since that Executive order been the Regulatory Authority.


In 1999, the Liberian Legislature enacted the Central

Bank of Liberia (CBL) Act Section 39 of the financial

institutions Act placing credit unions under Non-

Bank Financial Institutions which mandated CBL as

regulators of credit unions (as cooperatives).


HOPE AND PROSPECTS OF LCUNA’S BENEFIT

FROM EU PROJECT

1. First of all, we are grateful that the Irish Foundation has included LCUNA in the project.

2. We wish to state categorically that one of the most important components of LCUNA’s Professional Standard Operations Procedures is Education, Capacity Building and Modernization of the Credit Union Movement of Liberia.

3. In the Light of the above, we wish to appeal to the European Union (EU), Development Partners and Stakeholders to support LCUNA’S Education and Training Program which covers a Broad spectrum of activities as outlined below:


1. Members duties and obligations

2. Personnel duties and obligations

3. Accounting Principles and Auditing

4. Good Reporting, Monitoring and Evaluation

5. Board of Directors role and responsibilities and limitations,

6. Central Management Team – role and responsibilities and limitations;

7. Cooperative law and credit unions

8. Constitution Bylaws and formation of credit unions/standard operations procedures

9. Democratic principles and good governance of credit unions under the principle of equality and equity of one member – one share – one vote;

10. Risk Management, Financial Security and Investment of Central Funds

11. Resource Mobilization (Internal and External)


In order to incorporate the above into Implementable Action Plans, LCUNA wishes to renovate her headquarters, a story building located in Paynesville, Red-light. The building has capacity to hold a Modern Training Center to be furnished and refurbished, with modern state- of-the-Art training equipment and materials. The cost estimate of renovation has been provided by a professional engineering firm approved by the Ministry of Public Works. The entire cost estimate for renovation of LCUNA headquarters is USD$83,000 and LCUNA is presently contributing USD$5,600 to repair and replace the roof structure. This is an attempt to rebuild the damaged structure of the building against intensive rainfall. The rainy season will be very severe in Liberia in the ensuing months of July, August and September.


The supra mentioned budget is only for the renovation of the central office building; but the furnishing and refurbishing with the modern state-of-Art training equipment and materials will be done when the renovation is completed and cost estimate or supplementary budget will also be made available.


THE END

Presented by: Richard T.K. Phocole

Acting Managing Director

LCUNA, Liberia

GSM: (231)886516073

Email: [email protected]

[email protected]

On this 9th Day of July , 2012


mailto:[email protected]

mailto:[email protected]

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