Loan demand on the rise
More parents turning to financial institutions to ensure education for their children, says Belle
The demand for education loans has increased significantly.
That’s according to chief executive officer at the City of Bridgetown (COB) Credit Union, Steve Belle, who has attributed this rise in demand to the harsh economic times Barbadians are facing.
Additionally, he said, with more people being added to the ranks of the unemployed and university students now required to pay their tuition fees, more parents are turning to financial institutions to ensure their children can still get a university education.
It is for that reason, Belle said, that COB was now rolling out a new scheme to satisfy the demand. He said the initiative, which should be available next week, would see the credit union potentially partnering with insurance companies so they can provide insurance coverage in the event that a parent contributing to the plan becomes disabled.
The plan is also to charge parents interest only during the period of their children’s study and up to one year after completion of those studies.
“We recognize that is something we have to do,” Belle said this morning at COB’s Broad Street branch, during a presentation to winners in phase one of the Model School Credit Union Contest.
“The unfortunate thing is that the performance on your loan portfolio is dependent on what is happening in the market. When the economy is not growing there is a high level of unemployment, and obviously if you are unemployed it will impact your ability to pay. COB, like all other financial institutions on the market, is experiencing that.”
Belle said COB had anticipated increased delinquency in the current environment and was therefore working with credit union members to ensure they can “retain the assets which they worked so hard for in the time that they were able to pay”.
Giving details about the Model School Credit Union Contest, he explained that the programme, which is part of the Ministry of Education’s Financial Literacy Initiative, is aimed at bolstering savings among children up to the age of 11.
It exposes students and school personnel to the benefits that can be derived from credit unionism.
Belle said that under the COB programme, which began in March, there had been 400 new savers, saving more than $15,000. Fifteen St Michael schools have joined, on but COB expects that as the competition kicks into high gear more schools will get on board.
Today, schools were rewarded for their saving practices, including the winning school Wilkie Cumberbatch Primary School, Grazettes Primary School which placed second and third-placed Lawrence T. Gay Memorial School.