Central Bank’s Intervention and Changes at Saint Francis Xavier Credit Union

The Saint Francis Xavier Credit Union has been under scrutiny of the Central Bank of Belize since 2022 when an independent auditor was contracted to look into deficiencies highlighted during an audit report, shared at the credit union’s AGM that year.  Since then it has been a bumpy relationship between the bank and the credit union that led to a protest by some of the credit union’s board members and stakeholders.  According to the Central Bank, their intervention was done in the hope of placing some stability at the facility amid internal conflicts and strains on the operations.  In March this year, the Central Bank had appointed Martin Marshalleck as an administrator for the credit union, but he would have eventually stepped out for another career opportunity, making way for the new appointment of Marlowe Neal.  Prior to Marshalleck’s departure, however, he did confirm some discrepancies at the institution, as explained by Central Bank Governor, Kareem Michael.

Kareem Michael, Governor, Central Bank of Belize: “When the administrator was appointed and he began a work with his team he supported what the Central Bank was finding throughout the Central Bank’s off-site and on-site examination. In other words, that loans weren’t properly being assessed in terms of the borrower’s ability to repay. So a lot or a significant portion that some of these loans that were on St. Francis’ balance sheet were in fact non-performing and some of them should have been properly categorized and provisions should have been occurring already to safeguard the interests of the members. So the administrator began to work earnestly with his team to correct for the poor loan administration that was occurring at St. Francis as well as to up the collection efforts which worked or has been working so far. He was able that despite all these challenges to provide a rebate during that, not the AGM, but the special meeting that was held a couple months ago. So he’s setting up the proper governance. He had set up the proper governance framework and the staff was completely on board with his efforts. I say that only because that we have a good feeling of St. Francis and we want St. Francis now in terms of governance and performance to be a model for what credit unions should be, it’s a target to achieve. The transition now is that once we have placed in these governance framework and other policies and procedures, we expect this to be no longer than a year. So we’re targeting, depending on how well we do these things, and I mean we in terms of the Registrar of Credit Unions and the Administrator and his team, is looking as the final date will be next year June. So roughly a year and some change. And I say June because that’s when an AGM could be held or should be held. But again, this is just a target date. It is not set in stone and we want to make sure that all the proper systems and policies, procedures are in place. As far as a shift in the administrator the previous administrator had received a more lucrative offer one in which the credit union could not match and one in which the registrar would not have accepted even if that administrator had requested to stay.”

Governor Michael explained that the Central Bank is hoping to wrap up the need for an administrator at the Saint Francis Xavier Credit Union by the next June.  He further confirmed that while there is legal matters pending at the credit union, the previous General Manager, whilst not if office, continues to receive a salary, a situation, he says, the Central Bank cannot counter.

Kareem Michael, Governor, Central Bank of Belize: “The law doesn’t allow us to do anything other than that at this point in time. And the registrar, I choose not to comment on other actions and steps which we will take to address that.”

Once the Central Bank had installed an administrator in March this year, both the Board of Directors and the General Manager, Rafael Dominguez were benched from the credit union’s affairs.