The Central Bank of Liberia has set up regulatory standards for the formation of the credit union across Liberia.
In a two day brainstorming session at the Liberia Credit Union National Association’s (LCUNA) 5thAnnual General Assembly, which kicked off in the commercial city of Ganta on May 23, 2016, the CBL regulated that, among other things, a credit union should have at least 300 members to be eligible for license from the CBL.
The CBL also maintained that a credit union should not: lend money to non-members; conduct cross-border transactions; or take collateral, such as real estate or land that will deprive the shareholders from getting money on time.
The CBL also maintained that two credit unions should not bear the same or title as it will create conflict and confusion, but a credit union can have a window or branch bearing the same name.
“A credit union cannot directly or indirectly get into acquisition of land/property, except for officers/employees residents,” the CBL regulation said.
“The credit union cannot do cross-border transaction, take deposit from non-members or lend money non-members,” said the CBL facilitator Walloh.
“Credit does not engage in speculative transaction; gambling and betting,” he added.
According to LCUNA Managing Director, Mr. Yarkpazuo M. Gbusiwoi, the CBL regulation will make the credit unions credible and allow them to receive donor support.
He said many a time most of the credit union leaders take the credit unions as their own private businesses and use the shareholders’ money any way they felt. However, with this regulation, credit unions will able to maintain a standard that will make them vibrant and credible.
J. C. N. Howard, Deputy Head of Microfinance and financial inclusion unit of CBL, said CBL is responsible to monitor and regulate all bank and non-bank financial institutions, including credit unions, in Liberia. Based on the financial institution act, which was passed into law in 1999, the CBL since December 2015 decided to regulate credit unions.
The assembly brought together over 150 participants, representing all the credit unions in Liberia.