Taharqa Obika
Wealth creation at the grassroots level calls for an intentional, measurable strategy for access to credit in the Caribbean. W-PEARLS wealth creation ratios for credit unions introduce a transformative focus beyond consumption financing to building wealth. The pursuit of wealth has been a pastime of humanity since the beginning of civilisation. The credit union movement is a modern-day grassroots financial sector that supports inclusion and access to credit across the Caribbean and the globe.
Traditional credit union metrics
Credit union management is supported by the traditional P.E.A.R.L.S. system of ratios, which assesses, as the acronym outlines, Protection, Effective Financial Structure, Asset Quality, Rates of Return, Liquidity, and Signs of Growth.
In prior generations, the predominantly socialist Caribbean economies allowed capitalists and the government to engage in business. Therefore, capital formation for enterprises was not a major activity for the masses.
Capital formation, savings, or thrift, as referred to in the cooperative movement, was directed to education, home ownership, healthcare, and recreation. It was and still is not uncommon for the biggest “loan sale” periods to be back-to-school, Christmas (home repairs), and even Carnival or July-August vacation, the latter for recreation. However, none of the above are directly related to capital formation for entrepreneurship and wealth creation. Though it can be argued that education eventually leads to better outcomes, and the potential to generate and store wealth. However, the issue remains that there is no direct focus on wealth creation in the orientation of the credit union model in the Caribbean.
Legislative limitations
There are many reasons why credit unions in the Caribbean may not appear to be oriented to wealth creation. One such reason can be found in legislative restrictions. Credit unions, at least in my native T&T, where I once worked at the regulator for cooperatives, are not allowed to lend to businesses in the strict sense. Credit Unions are only allowed to lend to members who can either be individuals or other Cooperatives. There are a limited number of active non-financial cooperatives in T&T, accounting for significantly less than one per cent of all established businesses. Therefore, the business loans would be insignificant on an official scale. However, notwithstanding this legislative setback, credit unions have been able to lend to business owners and prevent comingling by separating accounts. It would be a good endeavour to measure the value of these strict business loans in relation to the total loan portfolio.
Grassroots empowerment:
Wealth creation at the grassroots level goes beyond official businesses. Several activities are designed to generate wealth. These wealth-creating activities can be shifted from the deck of consumer loans and added to the pure business loans. A common case would be an individual taking a loan to purchase a car that they intend to use a ride-sharing app to operate as a private taxi. Another classic example of entrepreneurial borrowing can be that of a traveller who takes a loan to go to Miami to purchase items for resale on return to the Caribbean. Some vendors may borrow to stock up on items to sell at Carnival, Christmas, the Emancipation Village in Trinidad, or other festivals. These are all income-generating activities, and the establishment of a suite of targetted wealth creation ratios will enable the credit union to better manage its contribution to entrepreneurship.
Empowering credit union members:
Extracting wealth creation lending from the loan portfolios will also help credit union meet the needs of its memberships. Many families are today seeking to create intergenerational wealth. It will also help quantify the impact of loans to empower membership. The W-PEARLS system can be used to measure the participation and inclusion of women and youth in wealth-generating activities facilitated by the credit union. It can support strategic partnerships, as Sustainable Development Goal 4.4 aims to increase relevant skills for employment and entrepreneurship.
Policy level implications.
This ratio, use and reporting can support policy formulation and implementation at the national economic level when aggregated across the ecosystem. For example, if we set a target of eight per cent of wealth-creating loans as a share of total assets, then in the case of T&T, if it is achieved, it would mean that over $1.6 billion or about US$250 milion would be actively supporting entrepreneurship. This is because the credit union sector’s asset base is reported to be US$3 billion in T&T. This statistic can significantly impact public policy as pertains to entrepreneurship development at the national level and can garner added support to the credit union movement in terms of advocacy.
A regional call to action.
As someone with over two decades in the financial, cooperative, and education sectors and a former advisor to the Ministry of Trade in T&T, I believe that it is important to implement any policy that promotes entrepreneurship development. The W-PEARLS system can support the orientation of credit union administrators, regulators, and government policy makers in any Caribbean territory to wealth creation. As the Caribbean Confederation of Credit Unions (CCCU) continues with its transformation agenda, I invite credit unions across the region to consider piloting W-PEARLS in their institutions.
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What is W-PEARLS
The W-PEARLS system is an innovative financial monitoring and management tool designed to complement the traditional PEARLS framework used by credit unions, with a specific focus on measuring and promoting member wealth creation.
Developed by Taharqa Obika, a financial strategist, former Cooperative Regulator, Head of Operations at a tertiary Cooperative and former Trinidad and Tobago Senator, W-PEARLS introduces a set of actionable ratios that track the proportion, performance, and impact of loans used for income-generating activities. By aligning credit union lending with productive outcomes—such as entrepreneurship, asset ownership, and economic mobility—W-PEARLS empowers institutions to fulfil their cooperative mandate more effectively. It also enhances strategic decision-making, regulatory reporting, and stakeholder confidence while positioning credit unions as inclusive financial partners for youth, women, and underserved communities across the Caribbean.
Ratio*Formula *Purpose
1. Wealth Generating Loan Share*Loans for income-generating member activities / Total loan portfolio × 100 *Tracks share of loan portfolio driving enterprise income. Target: ≥10%.
2. Wealth loan to asset ratio*Wealth-creating loans / Total assets × 100*Measures asset base efficiency. Target: ~8%.
3. New Wealth Loan Allocation Ratio*New wealth loans / Total new loans × 100*Indicators of current lending prioritisation. Useful quarterly/yearly.
4. Wealth Loan Delinquency Ratio* Non-performing wealth loans / Total wealth loans × 100 *Assesses risk profile of these loans. Aim low, <2%.
5. Wealth Lending Yield Comparison*{Interest income from wealth loans / Avg balance} / Overall yield *Compares returns; helps price wealth loans competitively.
Taharqa Obika (MBA Finance, BSc Economics) developer of the W-PEARLS Wealth Creation Ratios is a financial consultant, credit union advisor, and former senator of Trinidad and Tobago, dedicated to advancing wealth creation in the Caribbean.
📩Email: taharqa.obika@gmail.com, 📞 Phone: +1 (868) 749-692