The state-owned Rural Development Commission (RDC) is battling an “unacceptably high” loan delinquency rate which threatens funding for other micro businesses.
Without providing statistics, Senior Field Officer with the RDC Osmond Yearwood told Barbados TODAY his agency has been forced to take legal action against some clients.
He was speaking this morning on the sidelines of a World Food Day lecture at the Ministry of Agriculture, Food, Fisheries and Water Resources, Graeme Hall, Christ Church.
Yearwood, however, acknowledged that many of the delinquent clients had experienced major challenges ranging from job loss to a drastic falloff in business due to the prevailing economic difficulties.
“Persons are not buying a whole chicken anymore . . . [instead they are buying] part of a chicken. So therefore [poultry farmers’] turnover in relation to their production has been reduced and that also creates problems in terms of money circulating and flowing and [they are] therefore unable to pay,” Yearwood added.
The RDC official revealed that clients, faced with a decision between other financial commitments and their RDC debt, were choosing to pay other bills first.
“They pay their light bill, their water bill and when it comes to their loan, ‘man I ain’t have enough money,’ [is what they say, and] they leave us for last.
“The other problem is people have moved away from the enterprises . . . and abandoning their projects. Obviously, that would call for further investigation as to why,” he said.
The RDC official also explained that the agricultural food market was unpredictable due to challenges facing farmers, particularly with the recent heavy rains.
“The weather has played a very unpredictable [role] . . . the inconsistency . . . sometimes we have a dry period or a long, wet season and as such you would find your ability to produce, to cultivate and therefore your ability to get that production has shrunk a bit,” he said.
The RDC is among several state-owned enterprises targeted by Government for consolidation, merger or sale as the administration tries to bring its current account deficit under control.
Yearwood, while encouraging clients to come into the office to renegotiate their loans, also identified crop disease as another cause for delinquency.
“We are continuing investigations in terms of getting reasons. That is why we are asking persons to come . . . . If they find they are having difficulties in meeting their obligations in paying the loans, they should speak to the loans administrator and the commission’s loans officer and let us know what is happening so we can work with you,” he stressed.
Yearwood told Barbados TODAY the commission was committing time and resources to addressing the delinquency problem which threatens the RDC’s ability to lend to others.
He noted that the RDC’s revolving loan fund catered to rural enterprises such as hairdressers, livestock farmers and cut flower growers.
This year’s World Food Day theme is Change the Future of Migration, Invest in Food Security and Rural Development.