S.S.B. to Invest $20 Million in D.F.C.
The Belize Social Security Board has an investment portfolio of over four hundred and fifty-three million dollars in areas such as utility companies, banks and financial institutions, in agriculture and tourism. According to a public notice that was circulated, S.S.B.’s latest investment in the Development Finance Corporation is a twenty million dollar loan facility for a mortgage program, real estate, and infrastructure and refinancing. The monies will be disbursed over a two-year period in tranches of five million dollars and will run for a twenty-five-year period, including a two-year grace period on the principal payment. The loan proposal has been met by concerns that these monies, which are from the contributions that we currently pay in to S.S.B., could possibly end up lost if the D.F.C. gets so overwhelmed with non-performing mortgages. News Five’s Marion Ali spoke with C.E.O, Deborah Ruiz, who gave assurances that a due diligence exercise took place prior to SSB’s decision to invest. Here’s that report.
Marion Ali, Reporting
S.S.B.’s proposed investment of twenty million dollars of public funds to the D.F.C. underwent close scrutiny and screening before it was approved, like any other previous loan that the institutions has invested in, according to S.S.B.’s C.E.O, Deborah Ruiz.
Deborah Ruiz
Deborah Ruiz, C.E.O., S.S.B.
“Any investment that comes into us, it is screened first by our Investment Services Department, then it goes to another level, the Investment Committee, which has an independent chairman and members who review all the due diligence required for the loan, then they make a recommendation whether they’re in support of the loan or not, and it goes a further step up to the Board, which considers the loan, and double check all the details, and if they’re satisfied, there’s payability and all the criteria, legal requirements have been met.”
Ruiz explained that S.S.B. looks at the risks, the inflation rate, as well as the growth of the investment. The loan’s impact on national development is also taken into account. And this is not the first time that S.S.B. is investing in D.F.C. She reminded that in 2014, S.S.B. invested a similar amount in the lending institution.
Deborah Ruiz
“They are in fact paying off that loan and they are scheduled to pay it off by 2028. This loan was initiated back in 2014 and they are paying on time every month, so we have no problem at all with the D.F.C.’s performance in paying their commitments, none at all for them. We have loans in tourism, hotels in agriculture.”
S.S.B. has one loan in the shrimp farming industry that has not been performing well, but Ruiz says that after specific measures were taken, it has started to show promise.
Deborah Ruiz
“The principals are working very hard to bring back the industry and they are putting in place, to our satisfaction, mechanisms to rebound so I think that loan in the end will turn around.”
These investments are important, Ruiz said, in order that S.S.B. can earn interest to be able to pay out the growing number of pensioners in the future.
Deborah Ruiz
“The collections for 2020 was a hundred and ten million dollars and we spent eighty-four point nine of the collections on benefits. Of that, sixty-four point four million dollars alone was for long-term benefits. Because as you know, right now the pension rates are at a wage band of five hundred and twenty dollars per week. Once you have a minimum of ten years you get a base pension of thirty percent. Those persons who have worked over thirty-five years would get the maximum pension of sixty percent. We have to pay that for the lifetime of each person. The total contributions that you pay over that ten years is not enough to pay pension for your lifetime. So that is why we invest, so that we do not have to constantly have to be going back to contributors asking for contribution reform.”
Marion Ali For News Five.
