Usury Interest Rates?
A couple of days ago we approached our bank about rates for a commercial mortgage and were quoted rates of between 11.5 and 14.5 percent interest. Yet only recently I saw an article where the banks were attempting to pressurize the Central Bank to lower the interest rate paid to depositors from the current minimum of 2.5 per cent.
How can we in the private sector and Government, at least giving lip service to encouraging small businesses and entrepreneurship, tolerate ludicrous spreads like this of 9 to 12 per cent?
We are already forced to accept a level of poor service that would simply not be put up with in the countries where many of these banks have their origins. Unanswered voicemail messages, because its almost impossible to speak to a human being, lengthy and time wasting queues, endless delays in trying to procure critical documentation and managers who feel they have no obligation to respond to the written requests of their customers.
Small wonder that the President of The Bankers Association stated that 43 per cent of the non-performing loans were in the tourism sector. How on earth with all the other escalating costs can any small business service an interest rate of 14.5 per cent, let alone repay the capital.
This is an area that Government must intervene.