Members of the Cat Island Co-operative Credit Union Ltd. have expressed concerns over delays in the liquidation of the union, in which up to 400 people - primarily Cat Islanders - are thought to have had around half a million dollars invested.
Nathaniel Adderley, director of the Department of Cooperative Development, which regulates credit unions, said that the liquidation is underway but admitted that the process has been "slower than I would have preferred".
He said that at present the liquidator is attempting to verify account balances that would have been held with the union.
"I know they are trying to get the verification letters together," said Adderley.
"There's some difficulty with records that are available, but I don't think there is cause for alarm apart from the fact that it is delayed situation. I think it will be okay."
The Cat Island Co-operative Credit Union was founded in 1998, and until relatively recently was the only financial institution serving Cat Island. Established and headed by Cat Island resident and veteran credit unionist Eris Moncur, the union went into liquidation in the fall of 2013.
One member, who told Guardian Business he had around $30,000 in life savings in the union, said he only found out about its collapse last year when he saw an official notice in the media.
"It was supposed to be very secure. They were supposed to have insurance on everything," he said, adding that at the time he invested he was told the union was trying to expand into other islands.
Adderley said he believes that the majority of depositors in the union are from Cat Island, or "descendants of Cat Islanders".
While admitting that he was not certain of the exact figure, he said he understood there may have been around a $100,000 to $200,000 solvency deficiency.
Adderley said he believed the union may have been a victim of its size.
"The population base couldn't support the ongoing activities even though they had some people, descendants, they were not using the credit union at same level themselves apart from having savings there, and credit unions make money from giving loans and having interest on those loans," he said.
"I think in the case of Cat Island they didn't have the numbers to support the expenditure they had, that was part of the problem, you need the level of business volume to support your expenses, and if that is not resolved you will continue to have deficits."
The central bank is currently moving to bring credit unions, which became the most rapidly increasing source of savings in The Bahamas over the past several years, under its regulatory umbrella, like other financial institutions.
Draft bills and regulations have been prepared to facilitate the regulatory transition, with consultations presently underway on the legislative framework.
Asked if he felt improved supervision could have averted the crisis at the Cat Island Co-operative Credit Union, Adderley said: "I think there needs to be closer supervision, but you could have the best regulation and supervision and some things would still go under."
Adderley said the liquidation is being carried out by Stephanie Missick-Jones, general manager at the Bahamas Cooperative Credit League.
Missick-Jones stated that she is "in the process of trying to facilitate" the liquidation.
Eris Moncur could not be reached for comment up to press time.

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