Raphael John-Lall

Lo­cal cred­it unions, un­der the lead­er­ship of the Cen­tral Fi­nance Fa­cil­i­ty (CFF), have joined with the In­ter­Amer­i­can De­vel­op­ment Bank (IDB) to build T&T’s re­silience to cli­mate change by al­low­ing cred­it unions to of­fer “green loans” to mem­bers.

The CFF, which has its of­fice in Ch­agua­nas, is the de­vel­op­men­tal and fi­nan­cial in­sti­tu­tion of the co­op­er­a­tive move­ment. The CFF shared de­tails with the Busi­ness Guardian on which mem­bers of the fi­nan­cial com­mu­ni­ty and cred­it union move­ment are tak­ing part in the ini­tia­tive and what they are do­ing.

When asked how much mon­ey in fi­nanc­ing the IBD will be pro­vid­ing, the CFF said the de­vel­op­men­tal bank will be pro­vid­ing tech­ni­cal help but the loans for cred­it union mem­bers will come from their nor­mal loan port­fo­lio.

“The IDB has not stat­ed that in­for­ma­tion, they are cur­rent­ly pro­vid­ing the tech­ni­cal sup­port. The in­di­vid­ual cred­it unions will pro­vide the fi­nanc­ing from their nor­mal op­er­a­tions.”

Ac­cord­ing to its state­ment, the CFF, in col­lab­o­ra­tion with PECU Cred­it Union, Teach­ers Cred­it Union and Ven­ture Cred­it Union, has tak­en this ini­tia­tive by part­ner­ing with the IDB, with the sup­port of Glob­al Fi­nance of Cana­da. The IDB fi­nanced Eco-Mi­cro Pro­gramme has led to the ad­di­tion of green fi­nanc­ing to T&T lo­cal fi­nan­cial ecosys­tem.

The CFF added that par­tic­i­pat­ing cred­it unions are now able to of­fer a suite of green fi­nanc­ing prod­ucts to both green busi­ness­es and green con­sumers and will be build­ing on these ex­pe­ri­ences to fur­ther en­hance lo­cal ca­pac­i­ty to ex­cel in the face of cli­mate change.

“Recog­nis­ing the im­por­tance of the green econ­o­my and the in­vest­ments need­ed to tran­si­tion Mi­cro Small and Medi­um-sized En­ter­pris­es (MSMEs) and house­holds in­to a cli­mate-re­silient fu­ture for T&T, CFF and its cred­it union part­ners are col­lab­o­rat­ing with the IDB to help the cred­it union move­ment par­tic­i­pate in cre­at­ing green loan prod­ucts.

“This will sup­port the de­vel­op­ment of a green econ­o­my and lever­age the eco­nom­ic and so­cial ben­e­fits while con­tribut­ing to re­duc­ing our car­bon foot­print and those of our mem­bers through the in­tro­duc­tion of green fi­nanc­ing to their in­vest­ment port­fo­lio. A green loan is the fi­nanc­ing or re­fi­nanc­ing of an as­set to in­crease the user’s (in­di­vid­ual or busi­ness) re­silience and ca­pac­i­ty to adapt to cli­mate change through en­er­gy ef­fi­cient or re­new­able en­er­gy ap­pli­ca­tions,” the cred­it unions said.

The state­ment al­so ex­plained that the CFF, PECU, Teach­ers Cred­it Union and Ven­ture Cred­it Union will pro­vide green fi­nanc­ing so­lu­tions by:

(i) Pro­vid­ing green loans to mem­bers who wish to ac­quire green prod­ucts and ser­vices in­clud­ing en­er­gy ef­fi­cient ap­pli­ances, eco-friend­ly ve­hi­cles and fi­nanc­ing new and retro­fit­ted green build­ings;

(ii) In­creas­ing ac­cess to Re­new­able En­er­gy/En­er­gy Ef­fi­cien­cy (RE/EE) prod­ucts by part­ner­ing with key green sup­pli­ers in T&T’

(iii) As­sist­ing or­gan­i­sa­tions to adapt to cli­mate change.

The Eco-Mi­cro Pro­gramme equips cred­it unions with spe­cialised tech­ni­cal as­sis­tance to de­sign and pi­lot green fi­nance prod­ucts and build in­sti­tu­tion­al ca­pac­i­ty to analyse the vul­ner­a­bil­i­ty of loan port­fo­lios to cli­mate change.

The ob­jec­tives are to gen­er­ate en­er­gy sav­ings that trans­late in­to mon­e­tary sav­ings, re­duc­tion of Green House Gas­es (GHG) and the pro­mo­tion of en­vi­ron­men­tal sus­tain­abil­i­ty through the im­ple­men­ta­tion of in­sti­tu­tion­al green­ing poli­cies.

Ac­cord­ing to the in­for­ma­tion they pro­vid­ed, the CFF said the suc­cess­ful im­ple­men­ta­tion of this green fi­nanc­ing pro­gramme is ex­pect­ed to ben­e­fit, in the short term, over 150 MSMEs and house­holds ser­viced through the CFF and its three par­tic­i­pat­ing Cred­it Unions.

Ap­prox­i­mate­ly 100 man­age­r­i­al, tech­ni­cal and sup­port staff, cred­it com­mit­tee mem­bers, loans of­fi­cers, com­pli­ance, col­lec­tions, busi­ness analy­sis of­fi­cers have re­ceived train­ing be­cause of this pi­lot. This will be scaled up in the fu­ture as the pro­gramme is rolled out to in­clude oth­er cred­it unions.

The CFF al­so gave de­tails on how the fi­nanc­ing op­por­tu­ni­ties are tremen­dous for the cred­it union move­ment.

“As en­vi­ron­men­tal laws be­come stiffer, busi­ness­es will have to tran­si­tion to more en­vi­ron­men­tal­ly friend­ly prac­tices. The re­tool­ing of these MSMEs will re­quire green fi­nanc­ing as home­own­ers make the switch to green­ing their homes with en­er­gy ef­fi­cient ap­pli­ances and the ac­qui­si­tion of elec­tric and oth­er en­vi­ron­men­tal­ly friend­ly ve­hi­cles in the fu­ture.”

The CFF al­so said that the co­op­er­a­tive move­ment’s prin­ci­ples and val­ues in­clude so­cial re­spon­si­bil­i­ty, car­ing for the com­mu­ni­ty and car­ing for oth­ers.

“Un­der this pro­gramme, our cred­it unions and the move­ment as a whole will be en­abled to de­liv­er en­vi­ron­men­tal­ly friend­ly loans and in­vest­ments that pro­mote more en­vi­ron­men­tal­ly friend­ly prod­ucts and ser­vices, and guide their mem­bers to pur­chase eco-friend­ly prod­ucts and ful­fill the co­op­er­a­tive phi­los­o­phy of car­ing for the com­mu­ni­ty and mem­bers.”

The CFF added that their or­gan­i­sa­tion, PECU Cred­it Union, Teach­ers Cred­it Union, Ven­ture Cred­it Union and the IDB are very ex­cit­ed about what this pro­gramme means in the ef­fort of mak­ing that par­a­digm shift on T&T’s treat­ment and preser­va­tion of the en­vi­ron­ment.

“We strong­ly be­lieve green fi­nanc­ing will be the cat­a­lyst to cre­at­ing greater aware­ness of the ef­fects of cli­mate change and the need for more en­vi­ron­men­tal­ly friend­ly prac­tices in both con­sumer con­sump­tion and eco­nom­ic pro­duc­tion.”

The CFF jus­ti­fied why it is im­por­tant for mem­bers of the co­op­er­a­tive move­ment to get in­volved in the fight against cli­mate change.

“Many may ask, should cli­mate change be a con­cern of the cred­it union move­ment? Should this be the busi­ness of the gov­ern­ment? The CFF is of the opin­ion that the co­op­er­a­tive phi­los­o­phy of self-help and self-de­ter­mi­na­tion com­pels the move­ment to be in­volved. If our 500,000 mem­bers are like­ly to be neg­a­tive­ly af­fect­ed by cli­mate change, cred­it unions can­not af­ford to wait and ob­serve. In­deed, cred­it unions must now pre­pare and strate­gize so that mem­bers will sur­vive and thrive in the face of cli­mate change.”

The CFF in its state­ment gave ex­am­ples of how cli­mate change is hurt­ing not on­ly the fi­nan­cial and busi­ness com­mu­ni­ty but the coun­try in gen­er­al.

“The ef­fects of cli­mate change are hit­ting us very hard in T&T. We have all ex­pe­ri­enced it ei­ther di­rect­ly or have seen the hor­rif­ic de­struc­tion caused by wide­spread flood­ing in var­i­ous com­mu­ni­ties through­out the is­land. We are def­i­nite­ly see­ing changes in our weath­er pat­terns, and these can be di­rect­ly at­trib­uted to cli­mate change. These ad­verse weath­er con­di­tions have caused tremen­dous loss­es to life, prop­er­ty and have threat­ened our food se­cu­ri­ty through the de­struc­tion of food crops.”

The CFF al­so said that flood­ing is just part of the neg­a­tive en­vi­ron­men­tal im­pact T&T and oth­er Caribbean states have faced from the ef­fects of cli­mate change.

“We may re­call that, with­in the past decades, some of the is­lands in the Caribbean were de­stroyed by hur­ri­canes. These im­pacts will no doubt af­fect the way of life for us vul­ner­a­ble small is­land states, most of which de­pend on the en­vi­ron­ment for our very eco­nom­ic sur­vival through tourism, agri­cul­ture and fish­ing for ex­am­ple.”

The state­ment al­so said that at the CFF, the Cred­it Union for Cred­it Unions and Co-op­er­a­tive De­vel­op­ment, have long recog­nised the im­pend­ing eco­nom­ic and so­cial im­pact of cli­mate change for cred­it union mem­bers at home and in the wider Caribbean.

“As a re­sult, the CFF ini­ti­at­ed dis­cus­sions with the IADB Lab, who had de­vel­oped an Eco-Mi­cro Pro­gramme for coun­tries like­ly to be af­fect­ed by cli­mate change. The IDB Lab ap­proved the par­tic­i­pa­tion of the CFF and se­lect­ed cred­it unions. This has re­sult­ed in the readi­ness of the cred­it union move­ment to of­fer green fi­nanc­ing to its mem­bers.”