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Easy loans

by Emmanuel Joseph

Financial institutions in Barbados are on a campaign to ensure consumers have a happier than usual Christmas.

But investigations by Barbados TODAY have found that while commercial banks and the major credit unions were seeking to lure householders into borrowing “easy” retail loans this Yultide season, people were generally putting a pause on credit or making mainly small commitments.

President of the Bankers Association of Barbados, Horace Cobham, said this afternoon that Barbadians were slow in borrowing for major items such as land or house.

Horace Cobham

“People are typically borrowing less than $10,000 essentially for debt consolidation or small consumer items. This year is worse than last year. The downward trend started last year and continues into this year,” said Cobham.

However, speaking for his bank, RBC Royal, he said they would be taking to the streets of the City tomorrow to sell loans and credit cards.

“We will have a tent set up in Heroes Square from 3 p.m. to 9 p.m. This will give us a much better idea of how people are trending and how we can cater to their needs this Christmas,” added the bank executive.

“Up until now I am looking forward to a bright Christmas based on the trends seen so far.”

Consumers are also being offered loan goodies by Republic Bank, formerly Barbados National Bank. Its Managing Director and Chief Executive Officer, Derwin Howell, said the bank had embarked on a loan sale where individuals could benefit from reduced interest rates.

“The minimum amount one can borrow is between $5,000 and $6,000,” Howell stated.

While he was not certain about the exact maximum sum, he estimated a ball part figure of about $35,000.

Barbadians, he noted, have until December 31 to take advantage of this Christmas initiative. Howell, too, is optimistic about the outlook for this season, adding that he “is kind of surprised” at what his institution was observing business wise.

The island’s largest credit union, the Barbados Public Workers Cooperative Credit Union Limited, is also trying to give citizens a helping hand for Christmas.

Acting Marketing Officer, Tracia Pounder, said its November 1 to December 23 Christmas Line of Credit, was based around a reduction in the rate of interest from 16 per cent to 13.5 per cent.

“The other great features still remain. $4,000 credit limit up to two years to repay, revolving facility, one time application then available each year after, at Christmas time, and interest charged on a reducing balance,” Pounder announced.

The marketing officer explained that during December, the BPWCCUL would also be promoting gift vouchers.

“There are two voucher products: Thrifty Cash, which can be used to open accounts for children or be deposited to an existing account to help boost the child’s savings; [and the] General Member Gift voucher, [which] works just like Thrifty Cash, except it’s for adults 16 and over. Vouchers come in denominations of $25, $50 and $100,” she revealed.

The Barbados Workers Union Credit Union is also providing a window for the lower income earner to buy up for Christmas.

President Ashton Turney said the credit union had just began its Christmas loans with a maximum limited of $3,000 and a minimum of $1,500. Turney said first time borrowers were required to apply, while those who had done so before, did not.

“I find that people are not borrowing as much this year,” he poined out.

However, one of the largest credit unions, the City of Bridgetown Cooperative Credit Union, is not offering any consumer loans for the yultide season.

COB’s Chief Executive Officer, Steve Belle, told Barbados TODAY that his organisation did not encourage consumerism.

“We encourage investment, that is why we are promoting a new product for Christmas; our Registered Retirement Savings Plan. It is a post-retirement plan linked to a 5.5 per cent interest rate, which is just above the going savings rate,” disclosed Belle.

The CEO explained that the RRS plan allowed investors to claim $10,000 deduction on their taxable income and also boost their post-retirement income. He said the credit union also had a facility that made it possible for persons who did not have the cash to buy the RRS to borrow the money.

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