Deliquency Report

OVERVIEW

Delinquency is a problem that the Society has been encountering for quite some time. Members at times access the services of the Credit Union and fail to honour their obligations as agreed to under the terms and conditions of their respective loans.

• Over the past few years, additional initiatives were implemented. These initiatives include:
• Additional support for the full time recoveries Officer
• A more stringent lending process
• A Delinquency Committee with the responsibility to oversee the entire process.
• Working with the Commissioner for Cooperatives Arbitration Department to receive judgments on delinquent accounts

PAST INITIATIVES

—Over the past few years, additional initiatives were implemented.  These initiatives include:

• —Additional support for the  full time recoveries Officer
• —A more stringent lending process
• —A Delinquency Committee with the responsibility to oversee the entire process.
• —Working with  the Commissioner for Cooperatives Arbitration Department to receive judgments on delinquent accounts

PORTFOLIO AS AT 31/12/2015

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PORTFOLIO AS AT 30/09/2016

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ANALYSIS OF PORTFOLIO

• —A little over half or 53% of the total portfolio relates to debts less than 1 year old.
• —The value of loans 7 years and over total $881,625.13 account for 10% of the portfolio, and this has been the most problematic to recover.
• —This is due to its age and also to the fact that it is statue barred; these factors significantly reduce the probability or likelihood of recovery.
• —Non performing loans misrepresent the true value of the loan portfolio by their continued inclusion. Hence the decision to write off or remove them from the books completely.
• —While this will mean that the debts will no longer be on the books per se, they will be listed on the external debt collectors’ book of bad debtors in the event the member tries to access financing elsewhere.

CONCLUSION

• —Further the Society remains committed to continuing pursuing these debtors with the intention to recover these debts.—
• — In the event funds are recovered following the debt being written off, it will be recorded as income.

Conclusion

• —Notwithstanding the reality that a write-off is necessary for all debts over 4 years old, because of the quantum or value of these debts, only those debts over seven years old will be written off.—
• — In the financial year 2016, the sum of $800,000 of debts over 7 years will be written off.