While anyone can face financial hardship at any given time, many Bahamians seem to believe that as long as they stay away form the bank when they can't pay, all is well. This is apparently worse when the bank is The Bahamas Government.
My personal experience while working for the former Canadian Imperial Bank of Commerce (CIBC), now FirstCaribbean International Bank, confirms this view. However, Mr. Cash, former FNM Senator, has announced that "There are no untouchables" when it comes to defaulters of loans to The Bahamas Development Bank.
He is quoted as saying:
"Management has been advised to vigourously pursue every collection option at its disposal: There are no sacred cows; there are no untouchables."
While commercial bank policy was that no more than 1% to 3% of their loan portfolio should be non-performing, the Development Bank has reported that some 51 percent of their loans were non-performing in 2007. An incredible statistic even if loans granted by the Development Bank are generally more risky than private bank credit facilities.
When I was in the bank, loans were classified as non-performing if no payments were received in 90 days. They were not written off as bad debts however. When a loan was 'classified' that meant we had to redouble our efforts to contact the client and work out an arrangement for them to repay.
For far too long, it seems that government has chosen to ignore those people that have not made an earnest attempt to repay their loans from the Development Bank.
At the end of the day, there may be legitimate cases where nothing will be collected and the loans written off. However, one would trust that the security held would be sold to cover as much of the debt as possible, and commitments will be obtained from the borrowers to pay, as and when they can. No matter how little the amount.
So often, if a debtor would simply show their face from time to time, banks generally understand and try to assist when people run upon hard times. However, when they pretend they don't owe the money and ignore their commitment, the banks must use all means available to collect their depositors money or in the case of The Bahamas Development Bank, our tax dollars.
Go for it Mr. Bastian. You have this not so humble bloggers support...in spades!
