Basil Naar, general manager of Churches Co-operative Credit Union, plans to grow the financial institution's assets to $4 billion in 2007. - File

Churches Coopera-tive Credit Union (CCCU) is negotiating $500 million of external financing to build out its mortgage portfolio to offer home acquisi-tion loans of up to $10 million to members.

Churches general manager Basil Naar said this was the first move in a long term plan to place the credit union among the top providers in the mortgage market in 10 years, but more immediately he identified the mortgage fund as one of several initiatives to grow Churches' asset base to $4 billion by year end.

The mortgage market was valued at $14.5 billion in 2005, just over $10 billion of which was controlled by building societies. The National Housing Trust, as a single unit, had been the dominant player in terms of number and value of mortgages up to 2001, but was eclipsed in value terms by the private lenders a year later. The state agency had $4 billion of the market in 2005, a decline of 10 per cent over five years since 2001.

Tiny share

Credit unions and insurance companies have a tiny share of market, just about 1.7 per cent, having lost ground relative to 2004 when its share was 3.5 per cent.

The mortgage market itself has grown 77 per cent over the five year period. It is this boom that Churches wants to hone in on, by offering its members larger loans at competitive terms.

The credit union's unaudited results for 2006, said Naar, show a 17 per cent increase in its assets, a 22 per cent increase in deposits and 31 per cent for loans.

The credit union, in 2007, hopes to boost its product subscriptions from 2.5 to four products per member; and bump it further to six per member by 2009.

Naar's plans also include expansion in its Micro Lending Outreach Programme which will see the CCCU opening three micro business lending units in rural areas early in the second quarter of the year; as well as new targets for efficiency and customer service.

Effective this month, Churches is establishing a new Customer Service Quality (CSQ) department to expedite resolution of members' complaints.

"This unit will be headed by a senior officer and our decision to publish the name of the officer in charge in press advertisements is part of our commitment to guaranteeing results," Naar said.

In addition, the credit union has establishment a new benchmark for customer turnaround - 15 minutes.

Churches has already applied to the Financial Services Commission (FSC) for approval to manage an individual retirement fund on behalf of its members.

"Our hope is that all the approvals will be received in time for us to start the fund officially during the first quarter of 2007, having had our 'soft' launch in December 2006, as is allowed by FSC regulations," said the GM. "This product is expected to meet a major demand from members."

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