est. 2007

Barbados Underground

Bringing News and Opinions to the People

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…

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Adrian Loveridge – Hotel Owner

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.

  1. rubes Avatar
    rubes

    smells like collusion, price fixing , anti competition, unless the banks are not being paid back and therefore need a substantial risk premium but 9 points, thievery

  2. Caswell Franklyn Avatar
    Caswell Franklyn

    Sadly, sir, the banks will continue to fleece the people of this country and Government will do nothing because the banks know how to make campaign contributions. Do you recall the cheque for $75,000 that was bandied about a few years ago? Rest assured that was not the first contribution and certainly not the last. Those rates are a way of Peter paying for Paul.

  3. Mash up & buy back Avatar
    Mash up & buy back

    Adrian

    Thank you for lending your voice to this critical area of price fixing in the interest Banks charge and some of their fees.

    Barbados seem to be destined to be a country where international companies like Lime,Digicel and the Canadian banks just rip us off and no one stands up for us the customers of this island who pay the highest phone charges,have no flexibility in interest rates on loans and yet get crap service and the banks continually asking to keep our money – lend it out while they pay us peanuts on our deposits..

    I am ***@#**** fed up of these vultures and on the other hand the recent troubles of the credit union got me scared.

  4. old onion bags Avatar
    old onion bags

    This is an area that Government must intervene.
    —————–
    don’t hold your breathe……consider Alexandra

  5. Caswell Franklyn Avatar
    Caswell Franklyn

    Mash up & Buy Back

    I am a credit unionist and will be until the day I die. Like you, I am also getting scared because Government (both BLP & DLP) can’t seem to keep their grubby hands off and that is what scares me. They see large sums of money and get excited to the point where their operatives move to take over control of the movement. If you want to have renewed confidence in the credit union movement, you must first wrestle it away from the politicians. The two major credit unions are already infected to the point where the former administration used them to illegally acquire shares. This present one used them to channel money to CLICO.

  6. Adrian Loveridge Avatar
    Adrian Loveridge

    While is the US recently I saw advertising for a device that fits on to mobile phones, Ipad etc., that allows SMALL (in fact anysize) businesses to accept credit cards at a fixed rate of 2.75 per cent with no annual/monthly fee or restrictive minimum turnover or contract. I believe that it could change the way our SMALL businesses do business on Barbados and if one of Credit Unions distribute the device, it could certainly give the traditional banks a run for their (our) money. I sent the details to one of our telecommunications companies and a financial institution, but a week later have not heard back from either of them (same old, same old).
    http://www.squareup.com

  7. David Avatar
    David

    http://www.youtube.com/das_captcha?next=/watch%3Fv%3Dz0BwYz1P0BE

  8. David Avatar
    David

    @Adrian

    Read up on the square reader you posted, if you read the fine print this service is available in the US only.

  9. Adrian Loveridge Avatar
    Adrian Loveridge

    David,
    Yes! I realise that, but thats at the moment.
    If we have wireless capability, should it present a problem?
    Thats why I contacted one of our telecommunications companies.

  10. David Avatar
    David

    @Adrian

    See the below:

    6. Your Square Account.

    By creating a Square Account, you confirm that you are either a legal resident of the United States, a United States citizen, or a business entity authorized to conduct business by the state in which it operates. The Services and your Square Account may only be used in the fifty states of the United States of America and the District of Columbia. You may not export the Services directly or indirectly, and you acknowledge that the Services may be subject to export restrictions imposed by US law, including US Export Administration Regulations (15 C.F.R. Chapter VII).

    https://squareup.com/legal/ua

    This extract seems to be suggesting that the service is limited to the USA.

  11. BAFBFP Avatar
    BAFBFP

    Adrian

    The rate of inflation in Barbados has been running at around eight per cent for years. There is ABSOLUTELY no way that a non-governmental lending agency is going to lend money at 2% … not ’bout hey…!

    Hal Austin

    Assuming you read BU, which I think you don’t, please take a leaf out of Adrian’s book. Short and to the point …!

  12. BAFBFP Avatar
    BAFBFP

    Now when you lend someone at a higher interest rate with the excuse that it is a high risk loan, the result of course is to make the risk of getting your money back even higher after all the level of difficulty to repay has been increased.

    A few days ago I wrote a blog that suggested that the Central Bank, the NIS and the CDB distributed funds to various agencies for the sake of solving the problem that Adrian Loveridge is referring to. Now the agencies have matured and the types of businesses in whose interest they were set up in the first place are now unable to access the funding that they require period (far less at reasonable rates). If Governments cannot solve that problem with their own institutions, they are very unlikely going to be able to speak to the privately owned banks (moral suasion)

    Caswell

    75,000.00 is small fry … That is probably why it ended up in someone’s back pocket …!

  13. To the point Avatar
    To the point

    @David

    we have magic jack working here and the majic jack is supposed to be for the american market, am i wrong? So with the internet anything is possible

  14. David Avatar
    David

    @To the point

    See comment @7.25AM. This service is offered in the USA period.

  15. Green Monkey Avatar
    Green Monkey

    Don’t blame the bankers

    Another week, another banking scandal. If you’ve seen the papers you’ll have seen Barclays boss Bob Diamond falling on his sword and professing his love for Barclays, the bank at the centre of a scandal about manipulating interest rates. Politicians have been expressing their moral indignation that a bank – a bank, of all things! – could do something that wasn’t entirely in the public interest. And yet, for the fifth year since the banking crisis started, the media once again managed to cough up a million words of analysis whilst completely and utterly missing the point.

    So what if Barclays manipulated Libor, the interest rate statistics that influences how much interest people pay on millions of mortgages, loans and other financial contracts? We’ve given the banking sector a monopoloy on creating the nation’s money supply, in the form of those numbers that appear in your account. Rather than getting angry that we’ve been slightly overcharged for the privilege of borrowing this money from them, maybe we should be getting angry that we’ve been put in a position where we are – collectively – forced into a position of debt to the banking system.

    We have to stay focused on what the real problem in banking is. We need to tackle the creation of money, by private profit seeking-banks, for their own short-term interest. A system like this will never work well for society or ordinary people.

    http://us1.campaign-archive2.com/?u=7396d6c5dc44c9d3b64d8265c&id=d0eefa18fc&e=2a0c5d0036

  16. Green Monkey Avatar
    Green Monkey

    Ever Wondered Why There’s So Much Debt?
    Watch this 3 minute video to discover where all this debt came from, and why it can’t be repaid…

  17. David Avatar
    David

    What is interesting here is if/when the current investigation will expose other banks.

  18. Green Monkey Avatar
    Green Monkey

    97% Owned – Monetary Reform documentary

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