The launch of Sagicor Bank has been generating interest in the Bajan social media space. Besides the fact that it manages business electronically; a win for GenX and GenY, it has been paying significantly more interest for deposits than its more established counterparts.
Barbadians in recent years have been starved of a decent rate of interest on savings after the government through its agent the Central Bank of Barbados connived to eliminate the minimum savings interest rate requirement. Some suggest it was a not too obvious tactic by the government to attract borrowing through the popular short term government paper savings bonds
The graph of a simple interest rate calculation on three deposit amounts using three different interest rates based on what Sagicor Bank is offering illustrates the ‘tidy’ sums depositors will now benefit. It is better than its counterparts BUT a more sober blogmaster is aware the bank must be offering higher rates because it need to grow deposits to a level before it joins its competitors to lend for the usual consumer items. In other words, it is not offering higher interest rates out of kindness for Bajans. At some point interest rates will settle to what is being offered in the market.
The blog is not an attempt to criticize Sagicor Bank interest rate policy, it is about understanding what it takes to excite and energize key segments of the Barbados population, especially the youth. Why are Barbadians who may average $1,000, $5,000 and $10,000 on bank accounts excited about earning $20.00, $100.00 and $200.00 respectively yet demonstrate an opposite feeling for the many issues confronting the country? The interest amounts mentioned exclude withholding tax deductions.
We- meaning civil society- continue to ignore rising cynicism and apathy in the country, especially as it pertains to citizen participation in government. Why are our best people refusing to raise hands to participate in the running of the government and non governmental organizations? If significant sums are allocated to the national budget and the result is a people disaffected, apathetic and cynical by ignoring civic responsibilities, what is the point? Barbados has reached a critical juncture in its history, our fields, hills and best local companies are mainly owned by non Barbadians. Gen X, Gen Y and other Barbadian segments seem to care less.
How can we increase the rate of interest to generate interest in matters of greater import?
…Selling off national assets that SHOULD be the heritage of future citizens to foreign vultures for a pittance, only to then have them rob us blind before our very eyes… while shipping our (now borrowed) resources back to their home countries as profits.
The only ‘growth’ has been the percentage of Bajan assets now under foreign ownership and control…
Please also explain to wunna new CBB governor, that it is NOT useful to measure national growth by comparing GDP from year to year, unless inflation is accounted for….Bush Tea
The other learning from the interest being shown by many in higher interest rates offered by Sagicor Bank is the public’s reacting to what is savings and what is an investment. Recently the Governor of the Central Bank created a PR event around the decision by FCIB to purchase a significant amount of government securities. Some understand the urgency of government, post debt restructure in 2018, to try to restore investor confidence in the domestic market given the significant deficit in government′s finances. Unfortunately the blogmaster is not sensing a similar level of enthusiasm by individuals to invest in government security to match that of institutional investor FCIB. This government has failed to earn the trust back of the average Barbadian when it comes to buying government instruments. What will it take?
If the government is unable to coax individuals to invest in government paper, what will be the consequences? Do not say raise taxes!