Thursday, July 9, 2009

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Poitier: GB loan default 4 points higher than NP By INDERIA SAUNDERS ~ Guardian Business Reporter ~ inderia@nasguard.com: The head of a local lending institution is pegging Grand Bahama's loan default rate four percentage points north of New Providence's, the result of greater Great Recession on that island. "Grand Bahama suffered more casualties in terms of layoffs," said Alfred Poitier, CEO of National Workers Cooperative Credit Union Ltd. (NWCCU). "They really didn't have any form of recovery." It's a situation creating high delinquency rates across the island, with islanders even hard-pressed to pay for everyday essentials. That's to say nothing of bank loans committed to before an unemployment rate nearing 15 percent. Poitier is the first to try and draw a comparison between GB's delinquency rates and those of its richer counterpart to the south, New Providence. The former's relative failure is one of the very reasons driving NWCCUL to host a financial forum next week on that island, and even before bringing one to Nassau. "We understand there are a significant amount of delinquent people who lost jobs and are finding difficulty with their financial obligations," Poitier told Guardian Business Tuesday. "The forum is to give them advice on what they need to do to avoid [litigation]. "But we also have an attorney who'll tell them what to do and what to expect from the courts and how to cease it." It's a soft salvo contrasting with the more aggressive collections efforts exerted by lending institutions in recent months. They are efforts that, on any given weekday, can see the Nassau Street courts filled with loan default cases, said Poitier. And it's not all lending institutions taking these measures, with local furniture stores also taking delinquent customers to court. The current global situation with its implications on local foreign direct investment and Gross Domestic Product, explains Poitier, has left lenders with little choice. He is now hoping the court process will be expedited to push these cases through the courts in a faster period. "We don't like it, but when you loan money you have to do what you have to get it back," he said. "I think the process the law allows is fine, but it's a matter of execution for swift justice." In The Bahamas only one Supreme Court justice is hearing foreclosure cases, along with a slew of other civil matters, an arrangement that has bogged down the system. It's likely to be exacerbated as the economy continues to slide and homeowner incomes gets erased by reduced work weeks and outright redundancies. Bank officials also remain concerned about the real costs accruing to them because of delays in getting even date assignments for those foreclosure cases. To save the time and money, NWCCUL is hoping its forum will have an impact on curbing the delinquency rate. Wednesday, July 8, 2009