JPS & Partners 2017 Annual Report

Notes to the Financial Statements
For the year ended 31st December 2017
(Expressed in Jamaican Dollars unless otherwise indicated)
4.
Financial Instruments & Financial Instruments Risk Management (cont'd):
(a) Credit Risk (cont'd)
The significant concentrations of risk and the Credit Union's management of these risks are as follows:
i) Loans to Members & Guarantees
The Board of Directors is responsible for formulating the credit policies, establishing the authorisation structure
for the approval of credit facilities, limiting concentration of exposure to counterparties and developing and
maintaining the Credit Union's risk ratings. The management of credit risk in respect of loans to members and
guarantees is delegated to the Finance and Planning Committee. The Finance and Planning Committee has
oversight responsibility for the Credit Union's credit risk management process, including reviewing and assessing
credit risk. There is a documented credit policy in place which guides the Credit Union's credit review process.
The Finance and Planning and Credit Committees report to the Board on a monthly basis.
Credit Review Process
There is a documented credit policy in place to guide the credit review process. It establishes loan policy and loan
interest rates that manage risk and provide the best possible rate based on market conditions and ensures that
credit facilities are extended to members with good credit worthiness at the time of the loan, protects
savers interest by managing risk; provides competitive interest rates and prompt service to borrowers; and
complies with all applicable laws and regulations.
Collateral
The Credit Union holds collateral against loans to members in the form of mortgage interests over property, lien
over motor vehicles, other registered securities over assets, hypothecation of shares held in the Credit Union
and guarantees. Estimates of fair values are based on the values of collateral assessed at the time of borrowing
and are generally updated on a quarterly basis when loans are individually assessed.
Repossessed Collateral
The Credit Union obtained assets by taking possession of collateral held as security, as follows:
Carrying Amount
2017 2016
$ $
Real Estate 45,600,000 40,100,000
Motor Vehicles 450,000 1,850,000
46,050,000 41,950,000
Repossessed properties are sold as soon as practicable with the proceeds used to reduce the outstanding
indebtedness. In general, the Credit Union does not utilise the properties for business use.
Pushing you Beyond All Limits!
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JPS & Partners Co-operative Credit Union