Ganja, banks and partner plans

Depiction  of an early family in Sligoville, St. Catherine, the first Free Village established in Jamaica in 1835.

One eminent Jamaican intellectual, long since deceased, made the case as to why the growing and exporting of ganja (marijuana) took off in Jamaica in the 1970s. While the greed of growers and exporters was an obvious factor, the incestuous relationship between Jamaican banks (most of them local operations of foreign corporations) and local business elites was also a driving force.

According to this university professor, the same people who formed and led Jamaican large companies and conglomerates were the same ones who sat on the boards of local banks. Their self-interest was a deterrent to new entrants not only in the markets they operated, but into other, highly lucrative areas as well.

Stories circulated of branch bank managers turning down business loan applications because they knew managing directors and general managers at headquarters, who must answer to their boards, would not approve. Accusations were thrown about that after denying business loan applications, the bank managers and leaders themselves, or their cohorts, established businesses based on the very proposals they denied.

Having been shut out of the formal credit sector, enterprising Jamaican businessmen (and a few women) looked elsewhere. Ganja became the source of choice to obtain funding for business. It is alleged that several respectable companies in Jamaica today, big and small, were started with ganja money.

To the extent the above account is true, it demonstrates the ingenuity and resourcefulness of Jamaicans to “beat the system” and get ahead. Indeed, beating the system became a Jamaican virtue, for the system was seen as both corrupt and oppressive against those who were of the “lower classes” who had no “connections” and no wealth.

Most Jamaicans would not walk into a commercial bank to ask for a loan. Some fear debt, but for others, it was a perception that formal credit from the commercial banking sector was not meant for them, that their requests or applications would not be taken seriously and would ultimately be denied.

The government of the 1970s began to make it easier for ordinary Jamaicans to access loans. It established the Workers Savings and Loan Bank in 1973. British-operated Barclays Bank was nationalized and became National Commercial Bank in 1977. National Housing Trust was founded in 1976 specifically for house and land purchase.

Before then, it was left to enterprising individuals, groups and churches to enable Jamaicans to obtain credit. Among the first to establish the semblance of a credit system were the churches in the wake of full emancipation in 1838. Led by the Baptists and the Moravians, Free Villages were established in rural Jamaica. Pastors and churches bought estates and portions thereof, cut these into smaller lots, and sold them at heavily discounted rates to the newly released slaves. Towns and communities such as Sligoville and Kitson Town in St. Catherine, Albert Town, Granville and Refuge in Trelawny, Goodwill, Mount Carey and Salters Hill in St. James, and Buxton, Clarksonville and Sturge Town in St. Ann, all began as Free Villages.

Devon Dick in his book, Rebellion to Riot, points out that “The Reverend W.G. Gardner founded the first building society, Kingston Benefit Building Society, in 1834.” According to the 1875 Jamaica Almanac, the society was formed “to provide freehold houses for its members and improved dwellings for the working classes.” Similarly, the Almanac reported that the Westmoreland Building Society was established in January 1874 at the instigation of the Rev. Henry Clarke “for the purpose of Providing, Repairing, or Improving freehold houses for its members.” Building societies were formed in other parishes including St. James, Trelawny and St. Ann. Most have since been folded into what is now the Jamaica National Building Society, the largest of its kind on the island.

Peoples cooperative banks, among other things, provided loans and credit to the agricultural sector.  According to a paper for the Bank of Jamaica by Gail Lue Lim, “the first People’s Cooperative bank was established in Christiana, Manchester (rural Jamaica) on 19 April 1905.”

barclays bank note - Jamaica
A ten pound bank note, issued by Barclays Bank in Jamaica in 1937.

About a century after the formation of the first building society, the credit union movement began in Jamaica in 1941. According to Devon Dick, credit unions helped “ensure financial security for workers, and provide a source from which they might borrow money at a low interest rate.” As in the case of Free Villages and building societies, the church pioneered the founding of credit unions in Jamaica. Inspired by Father John Peter Sullivan, the Jamaica Cooperative Credit Union League was created in July 1942 and by 1944, “the Roman Catholics had 178 Credit Union Study Groups and Savings Unions in Jamaica.”

Perhaps the most ingenious initiative by Jamaicans to obtain credit is the “partner,” following on an ancient West African tradition known as Susu that has various iterations elsewhere in the Caribbean such as in Trinidad, Barbados and Guyana. Based on a system of trust, participants, which may be family members, friends or coworkers, “throw a hand” on a regular basis – weekly, biweekly or even monthly. On each rotation, one member gets to “draw a hand.” Through this means, Jamaicans have bought furniture and other household items, pay school fees and tuition, and have even purchased land and property or conducted house construction and repairs.

Because the partner (pardna) system is deeply cultural, several financial institutions, banks and credit unions among them, have tried to mimic these informal arrangements. The National People’s Co-operative Bank of Jamaica’s Partner Account “allows you to throw daily, fortnightly, weekly, monthly” and to “earn bonus on your draw.”

The Community and Workers of Jamaica Cooperative Credit Union has a Partner Savings Plan for members. First Heritage Cooperative Credit Union operates Hand to Hand Partner Plans, stating explicitly it is “a savings account boasting features of the traditional Partner Plan.” Instead of interest, it pays to the saver one eighth of a hand after 16 weeks, quarter of a hand after 24 weeks, two thirds of a hand after 36 weeks, and a full hand after 48 weeks.

When times are hard and funds are scarce, Jamaicans use their ingenuity by forging alliances of cooperation. Such initiatives include ways to finance household needs and business ventures. Those values helped to keep families afloat and communities going.

Eron Henry is author of Reverend Mother, a novel