Jamaicans Migrating Without Repaying Debt

• Senior financiers in Jamaica’s banking system say “migration and unexpected expenses” are amongst the top two reasons why people are late to pay their loans each month. An increasing number of Jamaicans are falling behind on their regular monthly loan payments, but the central bank says it is not yet worried.
• The data captured in the figures are for past-due loans, which are loans that have not been paid from anywhere between 30 days to 89 days. The migration of individuals who obtain loans from banks with no intention of repayment has become a significant concern for the banking industry. While it is understood that debt does not vanish upon relocation, the process of debt collection becomes increasingly difficult for lenders when borrowers move abroad.
• Due to the distinct credit systems and regulations of each country, tracking individuals who migrate can pose a challenge for creditors. Although reports suggest that a particular group of Jamaican migrants may be more responsible than others, the group has not been identified. In general, migrants recorded as overseas residents were behind on payments amounting to $6.8Bn as of March.
• Actors in the banking sector manage growth in past due loans by promptly contacting borrowers through emails and phone calls soon after loans become overdue. The introduction of credit bureaus in Jamaica has had a positive impact by making people aware of the consequences of non-payment on their credit history. This awareness has influenced behavior as individuals now consider how it could affect their ability to secure loans in the future.
• Overall “The stock of these loans on the balance sheet of the deposit-taking institutions grew by 32.1% to $42.9Bn in March 2024 from $32.5Bn in March 2023,” the central bank said. Further data show past due loans rose again to $50.1Bn by the end of April before declining to $41Bn at the end of May.
• However, the Bank of Jamaica (BOJ) said the increase in past due loans must be looked at in the context of the growth in the overall loan book of the nation’s eight commercial banks and one merchant bank. From that perspective, the ratio of past due loans to total loans was up “marginally to 2.96% at March 2024”, the central bank pointed out.

(Source: Caribbean National Weekly)