Credit Unions and Economic Growth in Trinidad and Tobago (TT)

The TT economy has experienced an average real GDP growth since 2008 of -0.8% per annum and for the period 2020-2026 its average real GDP growth is forecast at 0.33%. 

In this same period of time (2009-2019) there has been a rise in debt per capita from US$5252.9 per person in 2009 to US$10,905.1 per person in 2020.  At the same time note that the unemployment rate in TT is also on the rise standing at 5.1% in 2020 as compared to 3.3% in 2014.  More than all of this is the trend in the labour force participation rate which shows a decline from 63.9% in 2006 to 56.5% in 2020. 

Against this backdrop the economy requires all hands-on deck, pulling in the same direction. In this regard there is a serious and definitive role for the Credit Union Movement as rising unemployment, rising inflation and declining economic growth is an explosive economic combination. 

Credit Unions started in T&T around 1942; with the first Credit Union registered in the country being the Health Services Credit Union Society Limited. Moreover, despite Credit Unions in T&T emerging some years after the Movement in Jamaica and Belize, the T&T Movement soon outpaced those in other Caribbean countries, with a recorded 90 new Credit Unions being registered between the period 1946 to 1950. Indeed, the number of Credit Unions in T&T increased substantially thereafter and stood at 400 in 1995 before steeply declining to 127 operating Credit Unions in the country in 2020.  Note that Credit Unions contribute over 5.6% to T&T’s GDP, with Credit Unions’ share of TT’s total financial assets standing at 4.7% in 2020, as shown in Figure 2 below.  

Figure 2: Credit Unions’ share of Total Financial Assets in T&T (1990-2020). 

Between 2005 and 2020 the Credit Union Movement has mobilised a substantive volume of household savings to be utilised in the provision of affordable credit to its membership for a host of purposes including productive investments. In this regard, Credit Unions in T&T can be seen as “dynamic and a progressive people’s institution” and a significant contributor to the economic advancement of the country.  To a large extent, this may account for the significant increase of 32.05% in the country’s Credit Union’s penetration rate (see Table 1 below).     

In a 2003 presentation by then Governor of the CBTT entitled ‘The Role of Credit Unions in The Emerging Financial Landscape’ it was stated that the Credit Union Movement in T&T been resilient in its “ability to survive and prosper through good times and bad” adapting to cope with the changing financial environment.    

How can Credit Unions Help the T&T Economy Move Forward

Credit Unions can play an important role in assisting with the country’s diversification efforts by offering incentives and special rates on loans accessed by individuals and small businesses operating targeted sectors in the diversification effort, such as Manufacturing, Services and Agriculture. In this regard, Project 2020, an initiative of the Central Finance Facility offers tremendous potential for diversification.  As the CFF has been working with agricultural cooperatives and those with potential for foreign exchange earnings or savings to scale up their existing operations.

A special role may exist for the well-established Credit Unions in the oil and energy sectors. Given the closure of the refinery in Pointe-a-Pierre refinery for example, those credit unions whose members were displaced, should undertake an assessment of their feedstock communities, and respond aggressively to invigorate micro and medium sized activities within their catchment areas.  It is hardly likely the traditional providers of financial services will venture out of their creases for these communities.  In advancing such a thrust, the Central Finance Facility has been working with the Ministry of Finance to bring into fruition a one hundred million dollar Small, medium and micro-enterprise lending facility to bolster the efforts of credit unions in these areas.

The credit unions in TT in the context of the pandemic and the depressed state of the economy should contribute more to youth empowerment through Youth focused savings initiatives and financial literacy; fostering among the younger population the importance of savings and financial responsibility, with a view to encouraging and aiding in Youth entrepreneurship endeavours.

In a bid to re-start livelihoods and businesses Credit Unions can seek to make available Covid-19 response loans, emergency loans and existing loan re-payment modifications together with financial counselling to its members, so that they are better able to weather the continuing effects of the pandemic. 

Credit Finance Facility (CFF)

Founded in 2002 the Credit Finance Facility (CFF) stands as a secondary Credit Union body in T&T’s credit union industry. It offers its services to Credit Unions and other Cooperatives. It is the financial and developmental institution of the Cooperative Sector.

Through the pooling of resources, the CFF utilizes market leverage so that member credit unions can enjoy higher rates of returns. can be realized. The CFF also provides liquidity support and assists with the modernizing of members’ services.

Its primary aim is to advance credit union and cooperative members through the practice of Cooperation Among Cooperatives.

Examples of such cooperation exist in CFF’s Project 2020 which was launched in response the socio-economic vulnerability of Credit Union members exposed by Covid-19. Project 2020 aims at shifting credit union members from consumers to owners, enabling members to enjoy the Power and Wealth of Cooperative Ownership. Its focus is to transform Trinidad and Tobago into a people-centred society characterized by more equitably distributed wealth creation opportunities for its citizenry. This type of wealth sharing is critical as the reality is real GDP per capita today is approximately 20% less than in 2015.


As the economy recovers from the effects of the pandemic, it is possible that the response can be “K – shaped” where some consumer segments will recover more quickly relative to others.  In this regard, credit unions would have to do more homework and understand the aspects of this K recovery process they wish to support.  Critically given the trends in the stock of reserves of the TT economy, all credit unions can improve their roles as solid upright corporate citizens by pursuing measures to earn foreign exchange.  Yes, the economy may benefit from an upward movement in energy prices if the commodity price super cycle continues but beyond this what is needed is a strong focus on non-energy export revenue earning.  There is a role for all corporate citizens and the credit unions I am confident, will also be able to make a sound national contribution on the export revenue earning front, as well. 

Contributed by By Dr. Roger Hosein, Senior Economist