At least one banking institution has reported that it was forced to introduce counselling to help “save members from themselves”.
General manager of the Barbados Workers Union Co-operative Credit Union Ltd (BWUCCU) Corinne Clarke said in recent times a number of people were going from one institution to the next seeking to get a new loan to clear old ones.
Clarke said the BWUCCU saw a 20 per cent rise in demand for loans in 2015 compared to the previous year, but some of those applying could not afford the loan. Therefore, she said the institution decided to introduce professional assistance and guidance to its members.
“As credit unions we are forced to save members from themselves. So we decide to do some debt management counselling for our members who we believe need some of that because they are hopping from institution to institution, and not a lot of the institutions are offering that type of counselling,” said Clarke.
She said it did not help that some lending institutions were liberal with their loan approvals as long as they were able to do an automatic salary deduction, especially for Government workers.
“What we notice is that the loan is being approved once the salary deduction can be enabled. [They are] not necessarily doing the checks on the members to see if they have other facilities at other institutions. So the fast cash and some of the banks are lending like that once they can get a salary deduction,” she explained.
Meanwhile, president of the Barbados Bankers’ Association Glyne Harrison told Barbados TODAY that a lot of people had an appetite for unsecured loans, which are easily approved.
He said at this time of year the traditional banking institutions faced competition from loan houses “where you can walk in and walk out” but with higher interest rates.