With economic conditions in the country said to be worsening, Barbadians are not keeping up with their loans and other repayments like they used to, says a top official of the Caribbean Credit Bureau Limited (CCB).
CCB Chief Executive Officer Grady Clarke, who had earlier this year reported that Barbadians were not defaulting on their loans to any large degree, suggested today that the situation had changed somewhat, with the recessionary effect now showing up in personal credit ratings.
Addressing a news conference, Clarke acknowledged that Barbadians had generally had very good credit ratings over the years and had been “very responsible” in paying their bills.
However, without having the statistics to hand, Clarke said a cursory glance at the situation now showed that credit ratings were generally affected by the domestic economic crunch.
“We have had a very good credit score and we have been very responsible as a country, at least in the past. [But] in terms of the more recent statistics, when the economy is hurting then if you are seeing worsening credit ratings, that is to be expected,” he said.
“Where people’s pockets are being affected it is only reasonable to expect them to be a little slower in paying their bills and that will impact on their credit rating unfortunately,” he added.
Earlier this year Clarke had said that despite the economy not being the most robust in the region, “our delinquency and our credit is fairly well managed here”. He had also suggested then that the delinquency rates in Barbados compared favourably with those of other regional countries.
However, since then the Barbados economy, which grew by an estimated 2.2 per cent during the first half of this year, has been showing signs of a slow down with acting Central Bank Governor Cleviston Haynes suggesting last month that growth would be “in the region of 1.3 per cent to 1.8 per cent, compared to earlier estimates of 1.5 to 2 per cent”.
During a national consultation back in August, Haynes explained that the economy remained very challenged with the international reserves plummeting to $635.5 million or just 9.7 weeks of import at the end of June.
This is even further below the 12-weeks benchmark, from the $705.4 million or about 10.7 weeks of import as at the end of March with Haynes warning that it could put further strain on the island’s ability to maintain its 2-to-1 peg to the US dollar.