The Prime Minister held his quarterly press conference this morning. These events are newsworthy both for the announcements he makes and for the topical issues raised by the media. Today, the agenda was loaded; the Prime Minister spoke for over an hour and made announcements on a broad range of issues. The most newsworthy was the opening of the National Bank of Belize Limited. It's a government initiative to drive down interest rates at the commercial banks – and expand home ownership opportunities to middle and low-income persons. The board is Chaired by Minister Joy Grant and the Managing Director will be the former president of Provident Bank, Jose Karim Marin. The PM says they already have a motto.
Hon. Dean Barrow - Prime Minister of Belize
"I gather that the Board of Director has now decided that the motto of the bank is 'Of the People For the People'. The mission of the bank is principally to make residential mortgage and other consumer loans available to lower and middle income Belizeans, and in particular public servants and teachers, at cheaper rates than are being offered in the market at this time. The truth is that the whole idea is to put downward pressure on the lending rates of the commercial bank. The bank expects to lend consumers at an interest rate of approximately 6.5% on average. Initially, we are looking principally at mortgage financing. We're talking about the 6.5% on the reducing balance - contrary to what I understand to be the case in the commercial bank. I should make the point, ladies and gentlemen, that we are very proud of this bank and we intend to ultimately accept deposits and turn this into a full scale bank with all the services. The idea is to expand the home-owning class of this country, to provide cheaper access to credit, and we will not stop at mortgage lending although we start there. The idea is to bring down the rates as well at the commercial banks. I gather that the commercial banks have already had a meeting to determine how they will react to this. There was an announcement from Scotia Bank that they will take down their mortgage rate to 6.99%."
Currently the average spread at the commercial banks is more than 9% - up three points from what it was in 2009. The Board of Directors of the National Bank will also have the membership of Dylan Reneau as Chairman of the NTUCB and John Mencias of the Petrocaribe fund. That fund will provide the initial twenty million dollars for the bank-start-up. It will be housed at the former headquarters of the Small Farmers and Business bank which is being wound up along with the balance of 4.5 million dollars in principal due on the outstanding loans, plus 2.4 million dollars in interest due on those loans – meaning debt relief for 700 persons. The bank is currently recruiting staff, but no opening date has been announced.
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