Georgetown: Based on data borrowers failed to pay insta
lment on their mortgages for three months and this have increased by 69.7 per cent in 2015 and continues to skyrocket, according to People’s Progressive Party/Civic (PPP/C) Member of Parliament Irfaan Ali.
He said hundreds of Guyanese are on the verge of losing their properties as a result of inability to pay their mortgages, as the local economy continues to flounder.
“The non-performing loans moving from $8.8 billion to $20 billion, and as I said that was the half-year figure of the Bank of Guyana and over the last quarter it has not improved, it has deteriorated further. Some institutions would have been setting aside resources in excess of 100 per cent of that of 2014 for bad debt. These are the numbers we are having and that is a serious indication as to what is coming out of the financial sector and the banks themselves. So from the macro side, those are some of the numbers that present a worrying trend for us,” Ali explained.
Ali said there are a number of factors which are responsible for this crisis, including the fact that the new government has not created employment, but rather it has placed hundreds of persons on the breadline directly an indirectly.
He used as an example the discontinuation of the 100 Homes Project, which would have direct employment for more than 300 Guyanese, many of whom may have loans.
Another area that is responsible for the increase in non-performing loans, according to Ali, is the current crisis in the rice industry, where many farmers are millers are already having their assets repossessed by financial institutions.
“A lot of the rice farmers and millers have huge loans in the banking sector, they have their assets pledged to those loans and the banks will have no other choice but to come down hard on the rice farmers,” Ali said.
Further, the increase in non-performing loans can be linked to the slowdown in economic activities as many businessmen with huge loans are unable to make their payments as business transactions have slowed tremendously.
Another factor which is attributed to this fiasco is that of the increase in unemployment, as many large employers were forced to retrench their employees, again many of whom may be holders of mortgages.
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