$20 Million for National Bank Print E-mail
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Written by Shane D. Williams   
Thursday, 08 August 2013 00:00

Hon. Dean BarrowOn Wednesday the House of Representatives approved an injection of $20 million into the state owned National Bank of Belize Limited. The Government of Belize established the National Bank in April of this year. It will operate under the motto “Of the People for the People” and will provide loans at concessionary rates to public officers and low income Belizean families. According to Prime Minister Barrow, “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.” The bank is estimated to start lending at an average of 6.5% on the reducing balance of loans.

The $20 million approved by the House is only startup capital as the authorized share capital of the institution is $100 million. The Bank will eventually be divided into 1 million shares at $100 per share. The immediate goal of the institution is to expand the home-owning community by focusing primarily on mortgage loans. The Bank will also accept deposits and eventually expand its loan portfolio to finance small businesses and other developmental causes. Government’s $20 million is a subscription to 200,000 shares in the company.

The National Bank is Government’s most recent initiative to encourage other lending institutions to lower lending rates. Previous initiatives were more friendly towards those institutions such as the increase in Treasury Bills to provide local banks with an opportunity to invest its excess capital and make a profit. Those gains were not relayed to the consumers and lending rates dipped only slightly despite a worldwide recession. Now the local banks are forced to play ball if they are to compete with the state owned bank.