INSURANCE Employees Cooperative Credit Union Limited has moved a step closer to merging with Manchester Co-operative Credit Union (1977) Limited after its members approved the proposed merger, with Manchester members due to vote next month.

IECCU’s members voted in favour of the special resolution on August 20 to merge with MCCU, which would be the surviving entity. The merger would be executed through a transfer of engagements, meaning that property, other assets and engagements would be transferred from IECCU to MCCU.

The merger had failed to secure approval at a July 28 meeting, when only 67 of the 102 members present voted in favour, according to publicly available minutes. General Manager Mark Bowen confirmed to the Jamaica Observer on Thursday that support exceeded the required 75 per cent threshold at the August 20 meeting.

“The proposed merger is intended to create a larger, stronger and more resilient credit union that can provide expanded services, greater convenience and stronger long-term sustainability for members,” IECCU said in its frequently asked questions (FAQ) document to members.

There has been continued merger activity among credit unions over the last decade as the sector prepares for proposed regulatory oversight by the Bank of Jamaica. The consolidation has also coincided with growing demand from members for digital banking, electronic payments, and greater convenience.

“At the same time, credit unions across Jamaica are preparing for increased regulatory oversight by the Bank of Jamaica, higher compliance standards, stronger governance requirements, and significant investments in technology and risk management. Meeting these expectations independently requires substantial financial and human resources,” IECCU explained to its members.

IECCU said its board decided to pursue a merger as part of efforts to strengthen the credit union and protect its members, employees and legacy. While IECCU invited proposals from other credit unions, only the JDF Co-operative Credit Union, Jamaica Police Co-Op Credit Union, First Heritage Co-operative Credit Union Limited, and MCCU submitted proposals. The evaluation considered several factors, including cultural fit, projected capital ratio, returns to members, and geographic reach.

“Following the evaluation process the management and board concluded that Manchester Co-op was the partner best positioned to deliver long-term value to IECCU members. Manchester Co-op has been serving Jamaicans since 1948 and has grown through prudent management, strong governance and successful mergers,” IECCU detailed in the FAQ document.

IECCU was formed in October 1977 and serves more than 8,000 members, primarily from the insurance industry, through two locations. It had $1.68 billion in loans and $156.28 million in cash and cash equivalents at the end of 2025, with an overall asset base of $2.28 billion. Capital stood at $293.74 million.

IECCU’s net deficit widened from $13.75 million in 2024 to $39 million in 2025. The larger deficit coincided with a $35.08-million expected credit loss (ECL) provision compared to a $1.61-million credit in 2024. IECCU generated $178.61 million in net interest income in 2025.

With IECCU members approving the proposal, attention now turns to September 10 when MCCU members are scheduled to vote on the merger and three other resolutions. The meeting will be held in a hybrid format, with members able to join at iteneri.com/mccu.

MCCU was formed in its current structure in 1977, though its roots date back to 1948. It currently serves more than 48,000 members, primarily in Manchester, from two locations. According to the 2024 annual report, MCCU had $5.65 billion in loans and $233.33 million in cash and cash equivalents, with an asset base of $9.50 billion. MCCU’s capital base was $1.75 billion, about six times IECCU’s capital position.

MCCU’s net interest income grew 12 per cent to $707.55 million against the backdrop of interest income from members rising 24 per cent to $585.66 million. However, higher ECL provisions and a 30 per cent jump in expenses to $671.88 million left the credit union with a net surplus of $41.68 million, down from $132.63 million in 2023.

IECCU documents identify October 30 as the proposed effective date for the transfer. Under the merger proposal MCCU would change its name within three years to reflect a broader national identity. The merged credit union would have offices in Kingston, Mandeville and Montego Bay. IECCU representatives would also be allocated four additional seats on MCCU’s board, along with representation on the credit and supervisory committees.

“IECCU will no longer operate as a separate credit union following completion of the transaction. However, the proposal is designed to carry forward the values, relationships and member-focused approach that have defined IECCU, while giving members access to the greater scale and resources of Manchester Co-operative Credit Union,” IECCU said.

According to the Ministry of Finance & the Public Service’s fiscal policy paper, the fiscal year ending March 2027 will include a focus on enacting legislation to establish the regulatory framework for credit unions. The legislative programme includes the Co-operative Societies Amendment Bill and the Credit Unions (Special Provisions) Bill.

The number of credit unions declined from 32 in 2016 to 25 in 2019, and fell to 23 in 2025 after Gateway Co-operative Credit Union Limited and EduCom Co-operative Credit Union Limited merged on February 1 to form Infiniti Co-operative Credit Union.

Credit unions saw total assets rise $17.1 billion or nine per cent to $215.6 billion in 2025, the first time the sector surpassed $200 billion in collective assets. The sector had $147.1 billion in loans and $168.4 billion in member deposits, while its capital base increased five per cent to $24.3 billion.