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Stakeholders Update: Balanced and Climbing

Stakeholders Update: Balanced and Climbing

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The St. Vincent Building & Loan Association (SVBLA) will be celebrating 80 years of operations on July 4th, 2021.

The Association is owned by Vincentians, managed by Vincentians, for the benefit of all. During the last seven years the Association has implemented measures to ensure the viability of the institution, secure the finances and accounts of its members and balance the application of stipulations from the Financial Services Authority (FSA), along with the continued operations of the Association. The St. Vincent Building & Loan Association is pleased with its strides in weathering the challenges it has faced.

In 2013, the Association faced financial challenges resulting in the FSA stepping in to put measures in place to ensure the survival of the indigenous institution. The advisory from the FSA and the World Bank for the way forward was the implementation of a Recapitalization Plan. The adverse publicity associated with the financial situation raised concerns for many members, especially against the backdrop of the BAICO and CLICO institutions going into receivership in 2009.

The Association hosted and facilitated discussions for and with its members and other stakeholders about the Recapitalization Plan, and in 2013 they voted unanimously at the Annual General Meeting convened August 29th, for the Recapitalization Plan. Members and stakeholders viewed the Plan as the best way to ensure members did not lose all their investments and safeguard the survival of the Association. Under the approved Recapitalization Plan, a portion of deposits were retained as Permanent Shares.

The loyalty of many of the active members of the St. Vincent Building & Loan Association has shown that the institution is still one of choice, having provided members with options for Savings accounts with no hidden fees or charges, Mortgages and Consumer Loans, all with competitive interest rates. Full membership in the Association requires that members have 100 Permanent Shares which allows them the opportunity to: 1. Access all products and services; 2. Be eligible to apply for secondary school scholarships for children; 3. Vote at the Annual General Meeting; and 4. Have the privilege of nominating persons to the Board of Directors and having yourself nominated.

The details of the Recapitalization Plan were made available through print and broadcast media, personal letters and notices, which highlighted what was proposed by the FSA and the World Bank. The changes were implemented on September 1st, 2013, as follows:

• Special Deposit accounts

All Special Deposits were converted to Fixed Deposit accounts. However, prior to the conversion a percentage was allocated to the purchase of Permanent Shares.

• Active/Inactive/Dormant/Matured Redeemable Shares

The amount of $1,000.00 dollars was transferred to Permanent Shares, the remaining balance to Fixed Deposit accounts.

• A new product replaced the Redeemable Shares – The ‘Super Saver’ savings account which attracts interest at the rate of 3.25% per annum which is above the going market rate for savings accounts. The maturity period has been shortened to five (5) years, and there are no fines or charges for late payment. It is similar in principle to the Redeemable Shares.

Along with the approved Recapitalization Plan, the FSA installed a competent Board of Directors to give strategic and critical support and guidance to the Association. Further, an experienced Manager in banking and finance was recruited to lead the recovery effort of the institution. Meanwhile, SVBLA also had to manage a situation where deposits were withdrawn from the Association ahead of schedule, and loans issued by the Association became delinquent because of a reduction in or halting of payments.

As a financial institution operates through receiving deposits and lending at competitive interest rates, the Association ensured members’ deposits were managed for overall sustainability. Over the last seven years, the Association has made steady progress in its recovery effort and established a robust corporate governance structure along with updating the Association’s policies and procedures, to maintain a high level of due-diligence. The modernization of the Association’s accounting system has enhanced business operations, and with the introduction of new products and services, members and the public were given more options for savings. The reduction of the non-performing loan portfolio is also a major focus as SVBLA continues to re-engage with members and the public. Dividends on Permanent Shares were given to members twice during this period.

At the last Annual General Meeting held on October 31st, 2019, the Association realized profits for the financial year 2018 of $1.7 million. The accumulated surplus for the same time-frame was $4.97 million, an increase from the previous year’s $3.2 million. The Association has also implemented a new three-year strategic plan, with some new and exciting developments for the future.

The Chief Executive Officer of the St. Vincent Building & Loan Association, Mr. Elroy R. John, leading the growth and rebuilding process, said, “Notwithstanding the challenges brought about by the global pandemic, the Association appreciates the continued support of the public and is optimistic about the future. We are committed to serving our members and the people of St. Vincent & the Grenadines and the Diaspora, as we continue to work together for the full recovery and growth of the institution.”

As the St. Vincent Building & Loan Association anticipates its 80th Anniversary, the Board of Directors, Management and Staff of the Association are steadfast, enthusiastic, focused and working with purpose to realize and build on the foundation of the Mission of the Association: To provide the best financial solutions distinguished by product innovation, sustainable earnings and community partnerships.

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