A Financial Stability Report (FSR), jointly produced by the Central Bank of Barbados (CBOB) and the Financial Services Commission (FSC), in Barbados and released in the third quarter 2021, shows that workers in the island of Barbados have been increasing savings in credit unions, outpacing savings growth in banks, trust companies and other financial institutions.

At the end of the second quarter of 2021, the credit unions held BDS$2.87 billion in an amount which has been increasing quarter on quarter since January 2020.

Total sector assets at June 30, 2021 were just under $3 billion, including $537.90 million in cash, $1.80 billion in loans to members, $430. 42 million in investments and $96.58 million in fixed assets.

Total deposits still show commercial banks still ahead as institutional deposits, including from the credit unions themselves, increased, but the rate of growth for that sector was comparably lower relating to deposits from individuals.

Analysis in the Barbados Today publication said Barbadians had more confidence in credit unions as safe institutions.

Many also dislike rising banking fees and low or zero interest on deposits. The newspaper noted that investment options for the new inflow of savings are limited, as both borrowing and major projects have also been reduced since the pandemic. Further, it was noted, the appetite for investment in Government paper has eroded following a debt restructuring exercise.

A release from the Central Bank of Barbados on the stability report said that, while the effects of the virus on households and businesses elevated financial sector risks, “ given the pre-COVID strength of financial institutions and the regulatory support provided by the central bank and the Financial Services Commission, the system remains stable.”

The central bank said that commercial banks and insurance companies — life and general — remain well capitalised.

The CBOB commented, “The assets of long-term investors such as life insurance companies, mutual funds and pension funds also continued to grow, but the low interest rate environment and the unavailability of new investment instruments limited the investment options for these institutions.”

Banks and other lending institutions, including credit unions, tempered the effects of the interruption in employment opportunities and business operations by offering moratoria on loan repayments and restructuring debt in some cases, the report stated.

At last report (2016), the island of Barbados had 31 credit unions. Indications from the 2019 report of the Barbados Co-operative Credit Union League is that the group is considering a deposit insurance scheme.