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#463386 - 04/30/13 06:16 AM National Bank To Drive Down Interest Rates
Marty Offline
The Prime Minister held his quarterly press conference this morning. These events are newsworthy both for the announcements he makes and for the topical issues raised by the media. Today, the agenda was loaded; the Prime Minister spoke for over an hour and made announcements on a broad range of issues. The most newsworthy was the opening of the National Bank of Belize Limited. It’s a government initiative to drive down interest rates at the commercial banks – and expand home ownership opportunities to middle and low-income persons. The board is Chaired by Minister Joy Grant and the Managing Director will be the former president of Provident Bank, Jose Karim Marin. The PM says they already have a motto.

Hon. Dean Barrow - Prime Minister of Belize
"I gather the Board of Director has now decided that the motto of the bank is 'Of the people for the people'. The mission of the bank is 'Principally to make residential mortgage and other consumer loans available lower and middle income Belizeans and in particular public servants and teachers at cheaper rates than are being offered in the market at this time. The truth is that the whole idea is to put downward pressure on the lending rates of the commercial bank. The bank expects to lend consumers at an interest rate of approximately 6.5% on average. Initially we are looking principally at mortgage financing. We're talking about the 6.5% on the reducing balance - contrary to what I understand to be the case in the commercial bank. I should make the point, ladies and gentlemen, that we are very proud of this bank and we intend to ultimately accept deposits and turn this into a full scale bank with all the services. The idea is to expand the home-owning class of this country, to provide cheaper access to credit and we will not stop at mortgage lending although we start there. The idea is to bring down the rates as well at the commercial banks. I gather that the commercial banks have already had a meeting to determine how they will react to this. There was an announcement from Scotia Bank that they will take down their mortgage rate to 6.99%."

Currently the average spread at the commercial banks is more than 9% - up three points from what it was in 2009. The Board of Directors of the National Bank will also have the membership of Dylan Reneau as Chairman of the NTUCB and John Mencias of the Petrocaribe fund. That fund will provide the initial twenty million dollars for the bank-start-up. It will be housed at the former headquarters of the Small Farmers and Business bank which is being wound up along with the balance of 4.5 million dollars in principal due on the outstanding loans, plus 2.4 million dollars in interest due on those loans – meaning debt relief for 700 persons. The bank is currently recruiting staff, but no opening date has been announced.

Channel 7

#463387 - 04/30/13 06:20 AM Re: National Bank To Drive Down Interest Rates [Re: Marty]
Marty Offline

Prime Minister Announces National Bank Aimed At Expanding the Home Owning Class In Belize

Prime Minister Dean Barrow spoke of the formation of the National Bank of Belize Limited.  The Board of Directors will be chaired by Minister Joy Grant.  The bank’s motto is “Of the people for the people and according to the Prime Minister is expected to expand the home owning class in the country and provide cheaper access to credit.



"And of course the mission of the bank is principally to make residential mortgage and other consumer loans available to lower to middle income Belizeans and in particular, public servants and teachers at cheaper rates than are being offered in the market at this time.  Now the point is being made this is fiscal policy in action; government is directly intervening in the market to cut down cost in a sector that has far too long given too little back to those on whose back to profits that are made in the first place; ( somebody wrote that for me I am not quite sure I would have framed it in  as provocative manner as that) but the truth is that the whole idea is to put pressure, downward pressure on the lending rates of the commercial banks.  So while the phrasing here is, I would have nuanced it a little more;  it’s not saying anything that is not true.  We’ve indicated that the startup capital will be provided by the government of Belize from the proceeds of the Petro Caribe funds which we borrow at one percent over twenty years.  We’re putting twenty million dollars and we’re prepared to inject more over the short term depending on how the Petro Caribe program continues to develop.  The bank expects to lend to consumers at an interest rate of approximately six and half percent on average."

It is expected that over time the operation will evolve into a full scale bank.  The operations are located at the building formerly occupied by the small farmers’ bank. The much talked about Belize Infrastructure Limited was also discussed.



"This is a state-owned company wholly owned by the government formed to undertake the management of certain capital projects in Belize with particular emphasis on sporting and multipurpose facilities.  As I indicated, we are going to ensure that each district has at least one functioning multipurpose or sporting facility that can serve the needs of the community.  The reason why we created this special vehicle to execute these specific projects is because we want this thing to be done in the most efficient and timely manner and the Ministry of Works is already over burdened; it's stretched to its full capacity in terms of its current projects under the General Public Sector Investment Project."

The Prime Minister said an invitation had been extended to the Chamber of Commerce and the NTUCB to appoint a member to sit on the board of directors.



"This is a sixty million dollar vehicle but the projects will be chosen by the Cabinet of this country; it's not the company that will pick the projects, we will choose the projects but once we choose the projects, it is for the Board to invited bids for designs, for scope of works, it is for the board to design tenders from reputable contractors.  So in terms of the implementation, in terms of the execution, everything will be above board.  The activities of the company will be subject to the Contractor General, the full nine yards.  As i  describe it, what this is really is a project executing unit on steroids because we need to get this money out in order to stimulate activity out into the private sector.  All the contracting work will be done by the private sector contractors as well as to improve the quality of life for Belizeans.  So build then, is this over sight body that will engage the architectural services, the contractors, the supervisory services from the private sector to execute the projects.  like i said, they will put everything out to tender and will be subject to all existing government procurement and financial rules and regulations including subject to audit and to the Contractor General Review."

The financing for the bank will come from the Petro Caribe initiative as well as borrowing on the domestic market.


#463660 - 05/04/13 06:31 AM Re: National Bank To Drive Down Interest Rates [Re: Marty]
Marty Offline


Editorial, Amandala

At his press conference on Monday morning, Belize’s Prime Minister and Minister of Finance, Hon. Dean Barrow, announced the establishment of Belize’s first national bank. It is sensational news for us Belizean nationalists, because it is probably the only way forward where Belize’s domestic economic development is concerned. This is a bold step by our embattled Prime Minister.

Before we proceed, let us say that the only thing we wanted to hear about at that press conference was rosewood, because we are very, very angry about what is happening with rosewood. This is a situation where Belize’s elected politicians are defying and violating the expressed wishes of the Belizean people. Belize’s elected PUDP politicians did this before, repeatedly, with the selling of Belizean passports. And now, they are doing it again. Shame on the Government of Belize. Lord Acton, may he rest in peace, was right.

To the best of our knowledge, this national bank idea was first proposed by the late, brilliant Dr. Leroy Taegar. Since Taegar died a couple years ago, Bill Lindo had taken over the national bank baton. None of these two were given any credit for the idea, however, when Mr. Barrow made his announcement earlier this week. So that, if the national bank concept works, and it almost assuredly will, it is Mr. Barrow who will get the credit for the idea.

There is a lesson here for Belize’s young activists. There is much that is undesirable, sometimes downright abhorrent, about the political world, but, if you really want to do something you believe in, there’s no avoiding the world of politics. In the words of Ghana’s late Kwame Nkrumah: “Seek ye first the political kingdom.” Mr. Barrow had to possess the political power before he could implement such a progressive, almost revolutionary, idea. This is the reality of our parliamentary democracy. Leroy Taegar never acquired political power. From his mind came a powerful idea, but it took the elected politician for the word to become flesh.

Bill Lindo is probably more sinner than saint, but he should have been given some recognition, if only token. But this is not the way how Belize works. The circumstances of the idea’s implementation are such that Lindo may actually feel tempted to criticize it in practice.

The ruling faction of the Opposition PUP has spent several years claiming that Partridge Street cannot criticize P.M. Barrow because we are on his payroll. The journalists and columnists at Kremandala know that this is a laughable claim, because they criticize Mr. Barrow when and how they wish. But, it may be that what Queen Street really wishes for are editorial attacks on the Prime Minister. Wishes, sir, ain’t horses …

In emphasizing the power of the elected politician, we place ourselves, as newspaper publishers, in the category of the activists. Long experience has taught us that the idea is not worth a plugged nickel until it is implemented. And, in the Belizean political system, it is only the elected politician who can implement. This is the reality of our democracy.

On the same day that he introduced the national bank, Mr. Barrow defended his administration’s scandalous rosewood policy. Rosewood has tarnished Mr. Barrow: mayhap he will be redeemed by the national bank. Who knows?

Power to the people.

#463701 - 05/05/13 06:12 AM Re: National Bank To Drive Down Interest Rates [Re: Marty]
Marty Offline

National Bank of Belize Ltd – falling short?

By Richard Harrison for The Belize Times

The call for national banking is not new….in fact, it is decades old….and various angles of approach have been suggested….varying according to differing objectives.

The PM must be congratulated that he has listened to this call…perhaps reinforced via negotiations with the unions….and is taking action. Still…we should collectively seek to give him guidance.

THE WORKERS BANK OF BELIZE is a vision for a private entity, wholly owned by the workers of Belize who voluntarily choose to commit 5% of their incomes to be deposited to this bank on workers’ behalf, direct from source….a form of “forced-savings” to be truthful….collateralized by government grant transfers of 30,000 house-lots to the bank. Only “owners” would qualify to access low-interest, long-term credit…exclusively for home-construction and home-improvement loans…a sustainable formula based on pooling of existing resources…for savings and investments….not for consumption….making the workers’ money work over-time for workers and their families. I argue that this is more in Belize’s best interest…than the national bank as proposed.

Here are my concerns:

1. STATE OWNED – the bank currently proposed by the PM is another step in big-government…. instead of the private sector ENRICHMENT and EMPOWERMENT agenda proposed by the Workers Bank of Belize. With the current proposal, we get more centralization of resources and power….less private sector entrepreneurship and development. This formula does naught to harness the credit raising ability of the workers themselves…raising capital on their own from the private arms of CABEI, WB/IFC, IDB/IIC, EDF, CDB, etc…..so that the public debt is not put under more pressure….especially at a time when the public debt should be reduced and consolidated to create a more stable macro-economic foundation for rapid growth. Moving more towards state control….than towards private sector empowerment….I argue….is not in Belize’s best interest.

2. OBJECTIVE – the stated objective of this proposed bank is to pressure interest rates downward, towards an average of 6.5% p.a. While lowering interest rates is ONE of the things that need to be done to make Belize more competitive and productive….it is not a panacea… ALL the factors of input-cost-of-production needs to be lowered.

To foment the home construction and improvement market is good…but consumer loans has also been included in the proposed services…and this opens a whole can of ants and wasps and worms. Homes mostly constructed from imported materials…and consumption driven by imports….will only push us further into larger trade deficits. Lowering rates for home mortgages and consumption loans….without lowering rates for investments in the productive sector….will only create temporary housing construction jobs…and import distribution jobs….without creating the wealth from production to pay for these things. We have been down that road before. The promise of lowering interest rates is like the promise of “lowering the cost of living no matter what”… we already know the result of these politically tempered “objective settings”.

At the moment…6.5% p.a. interest can be considered….merely because the interest rates in developed countries have been at or near ZERO, as a means of stimulating their economies out of recession. There are signs that developed economies are moving out of recession…and rates will rise again. So then what?

3. COLLATERAL – to collateralize this effort with PetroCaribe credit… is much more expensive than collateralizing with workers income and government lands….which we already have….but need only the political will to achieve it. PetroCaribe credit still has to be paid for even if it is back-dated for future generations to pay. Ken Langone describes this thinking as “generational theft”. What this formula does in effect….is bind us to PetroCaribe even further….at a time when we should be seeking and working towards our greater ECONOMIC INDEPENDENCE. It also creates the formula that would keep fuel pump-prices high, which is the Achilles Heel of creating a robust competitive and productive Belize. Lowering interest rates, even if transient, without lowering the pump-price of fuel…is not putting Belize on a sustainable development path, based on competitiveness and productivity. The cost of ALL input materials also needs urgent attention, especially via overhaul of the Customs Tariff Law to favor production over importation. Production is where wealth is created.

4. OTHER – what the government should do….is create the enabling environment for the local branches of the commercial banks to trade shares in a BELIZE STOCK MARKET….so that Belizeans can own these banks or at least decisive shares in them….so that major portions of the dividends they earn stay in Belize.

The proposal as is…has all the signs….of a carrot in the mouths of the unions hinged on promised gains from an unpredictable harvest of more crude oil from new oil finds (which will decline over time as we have seen with the Spanish Lookout fields) and from PetroCaribe Funds performance (which will only remain if Venezuela does not change its volatile politics, and if Belize continues with energy politics that keep pump-price of fuel high).

It does not EMPOWER Belizeans based on their own competitiveness and productivity…..based on our own pooling of our resources that we work for every day….which we have control over….which gives us the potential to define more of our economic independence…and puts us in a position to grow our wealth based on growing our productive output.


Are we going for pie in the sky? Or make ECONOMIC INDEPENDENCE our visionary watchword going forward…where our wealth comes from the sweat of our brows….from the work of our hands….from the utility of our brain.

We, most urgently, need a concise articulation of our POST-INDEPENDENCE VISION…..this wayward drifting in the high seas is taking us nowhere anytime soon. This lack of VISION is what allow politicos to scheme and plot against our just objectives….against what we pray for in our NATIONAL PRAYER.

Richard Harrison is a local businessman and investor in the manufacturing and service industries. Mr. Harrison holds a Masters in Business Administration degree from Lancaster University, United Kingdom. Send comments to harrisonbz@yahoo.com

The Belize Times

#463840 - 05/08/13 05:44 AM Re: National Bank To Drive Down Interest Rates [Re: Marty]
Marty Offline

National Bank of Belize

A National Bank of Belize is on its way. The Belize Social Security Board (SSB) funds will form part of bank’s pool.

Minister Joy Grant: “We intend to accept deposits and turn this into a full-scale bank…”

Minister of Energy, Science and Technology, and Public Utilities Joy Grant will head the new National Bank of Belize, which Prime Minister Dean Barrow announced will be established to force commercial banks to revisit their interest rates, but which will also serve as a vehicle through which the Government will supply an initial $20 million for residential mortgages at a rate of 6.5%.

“This is a wonderful idea whose time has come…” said Barrow, adding that, “We mean to take it to the limit where this thing is concerned… We expect to be giving people a better return on their deposits than the commercial banks are doing.”

The motto of the proposed new national bank, said Barrow, is “…of the people, for the people,” and the mission, he added, is, principally, to make residential mortgages and other consumer loans available to lower and middle-income persons, and particularly to public officers and teachers, at cheaper rates than are being offered at this time.

Public servants and teachers have been lobbying for a cost of living adjustment. However, Barrow has hinged the raise on whether a commercial oil find is declared in the coming months. Although there are indications from Maranco (which has been exploring for oil in northern Belize) that there is commercial oil available, they have run into technical problems and so the extent of the oil-producing capability of the field won’t be known for weeks. Barrow reaffirmed his commitment to teachers and public officers today, while announcing the new financing scheme on the horizon.

The Prime Minister also signaled that Social Security funds will be moved from the commercial banks, where they are paid a low rate of interest, to the new national bank. He did not indicate what the savings rate would be.

“I’ve already spoken about the need to use some of that capital that, for example, SSB has tied up with the commercial banks getting little or nothing,” said Barrow, adding that the national bank will be able to give the SSB a better rate.

The whole idea is to put downward pressure on the lending rates of the commercial banks, the Prime Minister explained.

The interest rate spread has been going in the wrong direction, said Barrow. He quoted rates for 2009 and 2013, which indicate that the spread between the lending rate and the savings rate has increased from 7.69% to 9.38%.

Already, said Barrow, Scotia Bank has adjusted with advertisements that it will lend at 6.99%.

“We intend to accept deposits and turn this into a full-scale bank,” Barrow said, adding that Government is directly intervening in the financial sector to positively impact rates.

The managing director of the National Bank of Belize will be Jose Marin, former president of Provident Bank in Belize. Board members will include Deputy Financial Secretary — Marion Palacio, president of the National Trade Union Congress of Belize — Dylan Reneau, and John Mencias — GOB’s point-person for Venezuela’s Petrocaribe Initiative.

The first $20 million for lending will come from funds obtained under the Petrocaribe fuel initiative, for which GOB pays 1% interest.

This new program, Barrow said, adds to the mix and the scope of what the government is trying to do, in expanding Belize’s homeowner base.

The mortgage guarantee which Government has pledged for new homeowners will not apply to those borrowing from the national bank, Barrow clarified. Barrow said that the guarantee is for those borrowers who will go to the commercial banks, for whom Government is still prepared to put up the 10% guarantee for those transactions not exceeding $100,000.

Barrow pointed to almost $90 million in mortgage and education loans which his administration has written off.

The new national bank will be housed at the former premises of the Small Farmers Business Bank in Belmopan which the government has acquired. Barrow announced that $4.5 million in principal and $2.4 million in interest for loans held by 700 persons, who had borrowed from the Small Farmers Business Bank, will be written off.

He said that staff will be recruited for the bank, among them an officer to monitor the construction of new homes to ensure that borrowers get value for money, and that building standards and the scope of work is adhered to.

Corozal Daily (…Sometimes)


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