Doubt keeps loan market soft
It is fair to say that after nine months, the loan market in Barbados remains “soft”, says Barbados Bankers’ Association president Horace Cobham.
The senior banker told BARBADOS BUSINESS AUTHORITY that it came as no surprise that Barbadians were deferring or delaying taking loans since the start of this year, given the ongoing harsh economic circumstances. He said the more obvious loans people continued to shy away from were for cars, houses, land purchases or mortgages.
“I am not suggesting that those are not happening. I am just simply saying that those markets are pretty soft. So overall, I think the demand for financing has sort of tapered off, certainly during the course of this year. It is a function of the uncertainty in the economy,” said Cobham.
He also attributed the continued slow rate at which Barbadians were taking loans to the fact that some people were no longer working a full 40-hour work week. He said they therefore continued to only “take on financial obligations that they need to take on in order to live”.
Besides that, Cobham said some Barbadians remained very cautious, and therefore there was some degree of scepticism among them as to what the immediate future would hold. This, he said, was partially due to the fact that news on the global economy was not always positive.
“It is not surprising that Barbadians, being the prudent group that they are, are starting to sort of trim back and consolidate and try to position themselves to manage through what they might perceive to be difficult times so that they are better positioned thereafter,” he said.
As a result, Cobham, who is also the president and country head of RBC Royal Bank (Barbados) Limited, suggested that financial institutions provide “good financial advice” to their clients.