Commercial Banks are Fully Prepared to Work with Indebted Customers

Joy Grant

Financial institutions stand ready to work with their respective customers during this time of economic catastrophe.  The Central Bank of Belize, led by Governor Joy Grant, has been instrumental not only in securing funds for relief but also for working with commercial banks to lower their interest rates during this period.  According to Grant, most banks are fully onboard with the idea of holding off on payments until after a three-month period, to allow for customers to defray other expenses related to COVID-19.

Joy Grant, Governor, Central Bank

“The cooperation from the banks has really been stellar and what they have agreed to do primarily is to look at the loans that will need to be refinanced.  There are different approaches, one bank took the position that every loan that was performing on their books they would give a moratorium of three months on principal and interest and if you don’t want the moratorium then it was up to you to get in touch with the bank to say that you don’t want it.  The others have taken the position that you will come into the bank and negotiate with them about what is the best thing for you.  So interest rates in some instances are being reduced, the period for repayment, those are being extended.  For tourism which is being hit the hardest, for non-performing loans we’ve reduced the amount that they have to make provisions for from a hundred percent to fifty percent which means that they have more money out there to lend to other people.  And it is important too that the bank has agreed to two percent lowering of the liquidity ratio which puts an additional fifty-eight million dollars with the banks for them to lend because it’s all good to say that we are going to give people some relief on repayment but we have to get additional money out there because people must be ready for when the tourists or when business starts up again that they are in a position to start.”