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An aerial view of New Kingston, Jamaica. (Photo: wikicommons)

More Jamaicans struggling to repay loans amid pandemic

An aerial view of New Kingston, Jamaica. (Photo: wikicommons)

The number of borrowers struggling to make their payments continues to rise, said Bank of Jamaica (BOJ) Governor Richard Byles.

Bank of Jamaica Governor Richard Byles

Byles made the revelation while speaking at the central bank’s digital quarterly press briefing on August 26.

“As expected, there has been a slight worsening of non- performance loans since the onset of the pandemic. However, the financial system remains well capitalised with adequate liquidity to facilitate the continued smooth running of the sector,” Byles said.

“This buoyancy in growth in business lending has been largely driven by increased demand for working capital…”

– Bank of Jamaica Governor, Richard Byles

Byles added that COVID-19 had negatively affected loan demand, noting that the pandemic had tempered people’s appetite for credit.

However, Byles further said that there was an uptick in the demand for business loans.

“Growth in business loans remain relatively strong at 16.9 per cent in June 2020, slightly below the growth rate of 18.2 per cent recorded in February of this year. But for personal loans, we observed a more significant drop off in growth to 10.7 per cent at June compared to 15.3 per cent at February,” said Byles. 

Byles said the demand for loans had also been tempered by onset of the coronavirus pandemic.

“This buoyancy in growth in business lending has been largely driven by increased demand for working capital, as well as loans that had already been in the pipeline,” added Byles.

Byles also used the occasion to address the sliding Jamaica dollar which has hit a new low in recent times, with Jamaicans now having to shell out nearly $150 on average to buy one US dollar.

The central banker attributed the weaker dollar to the fallout in tourist arrivals due to the pandemic which has significantly reduced the availability of US dollar inflows.

–Denieca Brown