President of the Jamaica Agricultural Society (JAS) Senator Norman Grant, yesterday (Jan. 23) informed the Senate that the People’s Cooperative (PC) Banks had taken a decision to merge its operations into one national bank.The announcement came during a debate on a Bill to amend the Agricultural Credit Board Act in order to remove the grant and loan-making functions from that board.
Senator Grant said the aims of the new National PC Bank were to sustain economic growth within rural communities; provide for the financial service needs of small and medium scale enterprises (farmers and non-farmers); provide attractive benefits and employ qualified staff; and to create a more professional image of the banks. He said the National PC Bank would also raise its equity to loan ratio and improve the funds borrowed, as well as return full independence to the banks, making them self-sustaining and profitable.
In addition, Senator Grant informed, the loan policy would be diversified to achieve a less risky portfolio and yield a higher net income, with new lending parameters of 40 per cent for the agricultural sector; 30 per cent for the business sector; and 30 per cent for personal loans.
He emphasized that PC banks were no longer the only financial institutions through which small farmers could obtain credit and as such, the new entity needed to, “embark on an aggressive marketing campaign to firmly establish itself as the premier community bank, dedicated to serving its members and customers by providing products and services to meet their banking needs”.
Senator Grant said in its first three years, the National PC Bank would be focused on this task and as such, deliberate actions would be taken to achieve measurable improvements in the quality of the service the institution offered.
Noting that there has been growth in operations over the years, Senator Grant informed that the PC banks’ savings portfolio was reported at $497.1 million last year, as compared with just over $2.3 million in 1994, while the share capital portfolio, which was over $8.6 million in 1994, has since increased to$52.1 million. Meanwhile, membership has grown from 84, 115 in 1994 to 194,000 in October of 2003, with savers increasing from 4,290 in 1994 to the present 80,922.
The JAS President stated that the amalgamation of the existing 12 PC banks into one national entity would create a more dynamic institution and the bank would operate 38 efficient branches with diverse services, provide credit, mobilize savings, and provide financial services for small and medium farmers as well as other entrepreneurs. He said the reorganization also aimed to provide greater benefits to the employees and aid in attracting and retaining more qualified staff.
The National PC Bank, which will have its headquarters in Manchester, will be organized in 13 parishes and will be led by a 15-member board. Each parish will have a nine member board whose main function will be to oversee operations and approve loans as directed by the lending policy set by the directors.
Meanwhile, Attorney General and Minister of Justice, Senator Nicholson said the PC banks had played a significant role in the development of rural communities and had improved the lives of Jamaican small farmers who had for many years accessed funding for agricultural projects through these institutions.