Govt rejects GSD criticism of Community Credit Union Ltd

The Government says any business is welcome to apply for funding through the charity Community Credit Union – and that it rejects any suggestion that approval is based on whether the applicant is considered a friend of Sir Joe Bossano’s.

This follows criticism by Shadow Minister for Public Finance, Roy Clinton, who called Community Credit Union “the bank of Joe” – saying the Minister is acting as the sole judge on whether loans it grants to businesses are to be financed by the Savings Bank.

In a recent opinion piece in the Gibraltar Chronicle, Roy Clinton highlighted parliamentary answers from Sir Joe Bossano in January, where he said, “Community Credit Union does not have a role within the National Economic Plan. However, the Savings Bank invests in loan notes issued by the company. It provides funding to private sector projects that promote economic and social benefits to Gibraltar.”

In his Chronicle, piece, Mr Clinton asked, “Why is the Bank of Joe even necessary given the existence of Credit Finance Company Limited, which is owned by the Government and has a money lending licence … And who is really benefiting from its financial support?” – given what he called “the secrecy surrounding its creation and evident closed group of business interests that has access to it”.

In response to GBC questions, the Government says Credit Finance is used mainly for funding the Civil Service pension conversion into reverse annuities.

It says the Savings Bank has £900 million invested in 45 other money-lending institutions, none of which provide details of who has borrowed what money or how much.

It says, “In the case of Community Credit Union, a request for funding by a local business can be made to Minister Bossano. The proposal is then passed to the Credit Union to assess its feasibility”.

It goes on to say, “The Savings Bank will only provide funding to  Community Credit Union if it is satisfied that there are economic benefits to Gibraltar in the proposed project and once the necessary due diligence and technical assessment have been carried out.”

It says, “Approval is given without regard to who knows whom and without regard to any personal relationship … The Minister responsible for the Savings Bank has the final word on approval after the technical assessment has been completed.”

It says, “The Government has no interest in any company that receives funding from Community Credit Union.”

“The question is therefore not who may or may not have received funding. The question is whether the funding is supporting projects that provide economic and social benefits to Gibraltar.”