National Bank of Belize Open for Business - Now lending at 5.5% interest Print E-mail
( 9 Votes )
Written by Shane D. Williams   
Thursday, 05 September 2013 00:00

The National Bank of BelizeThe National Bank of Belize Limited is now accepting applications for mortgage loans from public officers and middle income Belizeans. The Prime Minister of Belize, Hon. Dean Barrow, established the bank in April of this year and commissioned the Board of Directors to begin operations as soon as possible.

The Board is chaired by Senator Joy Grant and Deputy Financial Secretary Marion Palacio is the Vice Chair. President of the National Trade Union Congress of Belize, Dylan Reneau, John Mencias and Hector Sabido are the other members of the Board. Senator Grant says she was honoured when Prime Minister Barrow told her he wanted her to chair the Board. Grant is also Minister of Public Utilities, Energy, Science and Technology. Senator Grant says she knew it would require great effort to lead such an important venture while executing her duties as Minister but it was a task she was determined to take on. The Board and its supporting cast worked tirelessly to establish an operation plan, recruit staff and renovate the old Small Farmers Bank building at the corner of Forest Drive and the Hummingbird Highway. As a result, the National Bank of Belize Limited opened its doors to the public on the first Monday of September.     

Prime Minister Barrow delivered the keynote address at the opening on Monday, September 2nd. He said, “I have long complained that in an international environment of all time low lending rates the inability of our commercial banks to seriously bring down the cost of money to consumers is a scandal.” He continued, “It is unacceptable that the spread between bank deposit rates and bank lending rates keeps widening in favor of the banks. In this regard, this government refuses a minute more to be the dog that only barks." The National Bank is Government’s most recent initiative to encourage commercial banks to lower lending rates. Previous initiatives were friendlier towards those institutions such as the increase in Treasury Bills to provide local banks with an opportunity to invest their excess capital and make a profit. Those gains were not relayed to the consumers and lending rates dipped only slightly despite a worldwide recession.

Prime Minister Barrow said, “Our bottom line is people and not profit. That is why our introductory offer to the people of Belize is an unbelievably low 5.5%.” The bank will, in this initial stage, provide mortgage loans to a clientele of first time home owners. Loans will not exceed $100,000. On Wednesday, August 7th, the House of Representatives approved an injection of $20 Million to be used as startup capital for the bank. Prime Minister Barrow said the finances will be derived from the Petro-Caribe Initiative. The Petro-Caribe Initiative allows Government to purchase fuel from Venezuela at concessionary rates and only a portion of the actual value of the fuel is paid up front. The difference is a deferred payment which is converted into a loan of 1% interest. The $20 million approved by the House is only startup capital as the authorized share capital of the institution is $100 million. Senator Grant said at the opening, “50% of the original equity financing is for public servants and teachers and the remainder is for the general public."

Due to the ghost of the past PUP administration there is always a level of cynicism when government is linked to a lending institution. However, as is evident with the lending program of the current DFC, this Government does not condone hanky-panky. Prime Minister Barrow said, “The National Bank cannot be a grab tub or the political pork barrel into which, for example, the previous administration turned the DFC.” Senator Grant said, “I think that is why the PM chose me to head the Board. This bank will operate in an accountable and transparent manner.”

Jose Karim Marin is the Managing Director of the National Bank. Marin says there are nine people currently on staff and hundreds of applications are being reviewed because the plan is to expand operations shortly. Immediately after the bank was declared open there were individuals starting the process to apply for loans. Marin himself joined loan officers to explain the procedures. He says, “By the end of December we should have a branch in Belize City and in less than three years we should be countrywide.” Prime Minister Barrow said, “I suspect that the demand will be over the top and let me signal from now that I expect to come back to the National Assembly before Christmas with another motion to put some additional equity into the National Bank because I feel that the 20 million will not be able to take care of even the initial demand."