Mutual financial firms in Jamaica: What STRATEGY for SURVIVAL?

This article discusses the business models of two mutual firms in Jamaica with a view towards answering one critical question: What strategy should Jamaican mutual firms adopt to avert or reverse declining financial health? Observations span a period of nine years to obtain a long-term picture of financial performance. The firms examined are the Community & Workers of Jamaica Cooperative Credit Union Ltd. (C&WJ) and the Jamaica National Building Society (JNBS).

The level of attrition of mutual financial firms in Jamaica is alarming. Over the period 1997 to 2017, the number of building societies fell from 13 firms to just two organisations. During the same period, the number of credit unions fell from 73 firms to only 28 entities primarily through mergers. Some observers argue that this is a positive development with mergers seen as a strategy for increasing firm productivity and competitiveness. Indeed, the total membership of mutual firms continues to grow despite firm attrition. Mutual organisations serve more than 70 percent of Jamaica’s workforce.

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