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Posted By: Marty S.O.S. FROM SAN PEDRO - 12/18/13 10:42 AM

Some home/business owners, in danger of losing all they have worked for because of stagnant economic conditions and unforgiving creditors, have spoken of suicide

The financial crisis is "worse than a hurricane"

What would you do if you found yourself in a situation where the hard-earned assets that you have acquired over a lifetime were about to be disposed of in front of your very eyes, and you are absolutely powerless?

Today, Amandala spoke with a group of people from the "tourism mecca" island town of San Pedro, Ambergris Caye, who have resorted to seeking the assistance of the media to address what they term as a "very real" issue that is currently affecting some residents of the island.

It appears that a group of mainly prominent, native San Pedranos are in danger of losing either their businesses, or properties that they have essentially toiled for during the course of their entire lives because of unforgiving creditors who refuse to take into consideration the stagnant economic conditions that have beset the island in recent years.

According to one of the hoteliers who have been affected, the situation has been created by the constantly rising costs of living, compounded by the fact that the unsuspecting borrowers procured loans at a time when the economic outlook was bright on the island; however, they have now found themselves in a distressing predicament - stuck between "a rock and a hard place" - and facing potential bankruptcy because of their inability to service those loans, which is ultimately leading to the complete loss of their homes and/or businesses.

These home/business owners are up in arms because they are presently at the mercy of seemingly heartless commercial bankers who apparently do not show a shred of leniency toward, or understanding for, their clients.

Overwhelmed with despair, the home/business owners emphasize the fact that they have been long-standing customers of the banks for many years, who have diligently serviced their mortgages; thus, they would have never thought that their businesses/properties would be liable to be auctioned.

Some have been overcome with fear that they would be targeted or victimized by their creditors, so most of the victims were reluctant to share their stories or reveal their identities.

However, one of the persons who said that she had felt the brunt of the meltdown that has unfolded, described the financial crisis as "worse than a hurricane," because she said that people get aid in the event of natural disasters, but presently, the islanders believe that they are now "on their own," because they have exhausted all avenues in terms of getting help from any of the relevant authorities, such as the San Pedro Town Council, the Development Finance Corporation (DFC), Beltraide and even the National Bank of Belize.

The situation has the potential of becoming even more tragic, since we understand that at least two of the business proprietors who have been affected have thought of committing suicide. Their frustrations stem from the fact that they don't have anywhere else to turn, and are petrified of the fact that their families would have nowhere to go if their homes were confiscated.

The persons with whom we spoke told us that the situation is "devastating," because the affected persons have so far done all that they could.

Their emotions were visibly high when they mentioned that they have pleaded with their creditors to "have a heart" and work along with them in order to renegotiate their payment plans, but to no avail.

When that option did not work out, they repeatedly requested Government's intervention, but GOB has also turned a blind eye to their plight, say the business owners.

The business owners stated that they simply want an opportunity to reconstruct their loan payments.

On two separate occasions this year - first on April 3 and then on December 9 - the concerned citizens wrote to Prime Minister Dean Barrow. In their letter, they declared, "For decades, we have endured crippling utility, transportation and labor costs, and it is only because of the lack of a level playing field in gaining access to investment capital and the rigidity of the financial institutions combined with the current financial crisis that have caused many of us not to be able to meet our financial obligations, causing us to suffer many reversals, foreclosures and hardships which are affecting our homes and everyday lives.

"Because of this, we have united and are forming an association to fight for our birthright and inheritance, and also to salvage what remains. For this cause, we request immediate action on your behalf (as the PM) to intervene and assist us in this urgent matter."

Hence, the San Pedro Founders Association was formed to provide opportunities for individuals who find it difficult to help themselves out of overwhelming debt.

In that effort, the members of the association plan to raise funds through donations and fundraising events, and to use those funds to provide financial assistance and legal advice to persons in need.

If you would like to find out more about the San Pedro Founders Association, or if you are interested in reconsolidating a loan, call 634-0041 or e-mail [email protected].

Amandala

Posted By: Nobody You Know Re: S.O.S. FROM SAN PEDRO - 12/18/13 11:07 AM
So let me get this straight. They borrowed money from banks and now the banks expect to be repaid?
Posted By: Diane Campbell Re: S.O.S. FROM SAN PEDRO - 12/18/13 11:14 AM
Lack of financial awareness is a crippling thing.

A couple of years ago I tried to restart a Junior Achievement program in Belize. There had been a chapter in the country before, but it folded due to organizational & financial issues. I could not get the international JA organizers to give us a go again .........

We will not see our way out of this sort of thing until people know how to organize their household finances, and unfortunately there is no program for educating people about this.

I'd like to see a financial counseling committee made up of accountants and successful business owners who can sit down with people and show them a way to organize their finances and work their way out of trouble.


Posted By: 3 beer story Re: S.O.S. FROM SAN PEDRO - 12/18/13 11:31 AM
Did the owners give all their profits to the bank when they were making them in the boom economy?
Posted By: Phil Re: S.O.S. FROM SAN PEDRO - 12/18/13 01:20 PM
I know several of these unfortunate people. One has an interest rate of 23%. The Bank won't renegotiate back to today's lower level and none of the other Banks will re finance due to the situation. Every single penny the business grosses on the books is forced to be paid to the Bank leaving nothing to run the business and reinvest. It guarantees failure and foreclosure. Yes they signed and made mistakes but this is on the verge of thievery by the Bank in question.

A lot of these old school San Pedrano's have no previous experience of finance and business Management and base their business strategy on today's income. Most were Fishermen that never finished High School and started working as teenagers out on the Reef. San Pedro expanded, they had family land and prospered venturing into a bright new field called Tourism, were inexperienced and had nobody to lean on for solid advice. They were preyed upon by the Banks (one in particular it seems) who to be honest were probably equally inexperienced in giving qualified loans. These people have no benefit of a Business Degree or Financial Planning nor had the chance to get one.

It's a very sad situation. I had hoped the new National Bank could help alleviate this and suspect that's why it was set up as GOB is sick of the Bank in question. Thankfully many of the next Generation do now have the ability to learn Business Management and many are doing so.
Posted By: Katie Valk Re: S.O.S. FROM SAN PEDRO - 12/18/13 01:45 PM
When was the boom economy?
Posted By: Amanda Syme Re: S.O.S. FROM SAN PEDRO - 12/18/13 02:22 PM
We had some super boom economies in the '80's and 90's and many of these loans will have stemmed from those great hey days.

It is unconscionable that local banks are still expecting business people to pay such high interest rates.

Here on the island people think getting a loan at 11.5% interest per annum is "good."

Imagine how these folks would thrive if they could be refinanced at 7%. Folks in the developed world have fairly easy access to 3.5% interest. If San Pedranos had such benefits we would be seeing lots of wealthy islanders, and I am sure the wealth would be shared and harnessed to improve the lifestyles of ALL island residents.
Posted By: artb Re: S.O.S. FROM SAN PEDRO - 12/18/13 02:28 PM
I went the motions of applying for a loan at few Belizean banks.
Their rates were usurious, I couldn't believe it until I heard it from 3 different banks.
What makes Belizean banks special in a sea of poor people, why are they entitled to more profit than banks in other countries?
Posted By: Rykat Re: S.O.S. FROM SAN PEDRO - 12/18/13 02:31 PM
"These home/business owners are up in arms because they are presently at the mercy of seemingly heartless commercial bankers who apparently do not show a shred of leniency toward, or understanding for, their clients."

You will find banks in the States have pretty much the same attitude - couldnt care less. But signing for loans at 23% and operating a business with probable margins of 10-20% (maybe) ain't too bright either.
Sad situation.
Posted By: bywarren Re: S.O.S. FROM SAN PEDRO - 12/18/13 04:22 PM
Here is a quote from the essay The Pros and Cons of Full Dollarization
"Countries with full currency substitution economies can invoke greater confidence among international investors, inducing increased investments and growth. The elimination of the currency crisis risk due to full currency substitution leads to a reduction of country risk premiums and then to lower interest rates. These effects result in a higher level of investment."

There are definate downsides to having a currency that is only good in the country of its origin.
One is higher interest rates.
Posted By: artb Re: S.O.S. FROM SAN PEDRO - 12/18/13 04:39 PM
Originally Posted by 3 beer story
Did the owners give all their profits to the bank when they were making them in the boom economy?

In the US they did later in the form of Bail-outs, thanks to their equally heartless congressional cronies.
Posted By: 3 beer story Re: S.O.S. FROM SAN PEDRO - 12/18/13 07:51 PM
The US banks were encouraged/urged at the time by SEC Paulson to accept TARP funds to help stem panic in the gloomy financial days of late 2008. I beleive most if not all banks have repaid their loans in full, with interest, so "bailout" does not apply. The govt actually returned a sizable profit to the US Treasury.

The Obama administration did a true bailout for the auto industry, which just sold all of its investment for a $10 Billion loss. But of course, they also saved Detroit, LOL.

Notwithstanding, I am curious, are the local banks privately owned or State owned? And if they seem to routinely charge 23% interest, what level do they pay their depositors?
Posted By: Loansum-Al K Re: S.O.S. FROM SAN PEDRO - 12/18/13 08:26 PM
I get 6.00% interest on my savings account with Belize Bank.
Posted By: champion Re: S.O.S. FROM SAN PEDRO - 12/18/13 08:32 PM
me too at Atlantic Bank
Posted By: artb Re: S.O.S. FROM SAN PEDRO - 12/18/13 11:59 PM
[quote=3 beer story]The US banks were encouraged/urged at the time by SEC Paulson to accept TARP funds

I'll bet that really took some arm-twisting.
Posted By: Bear Re: S.O.S. FROM SAN PEDRO - 12/19/13 12:02 AM
Originally Posted by champion
me too at Atlantic Bank


Yet now a non resident cannot get an interest bearing account according ot a neighbor...
Posted By: Noelle Re: S.O.S. FROM SAN PEDRO - 12/19/13 01:31 AM
Deleted - I think I misunderstood the post I was responding to
Posted By: Agavegirl Re: S.O.S. FROM SAN PEDRO - 12/19/13 03:09 AM
I am a non-resident but have had a bank account for many years. It took an "act of God" to get one but I have one. There is not much in it. Just enough.

However, I have to say I lack sympathy for persons who knowingly sign paperwork for loans or lines of credit and then complain. Business is business...you are not exempt if you are Belizean. I might be as a foreigner...but...you get the idea.
Posted By: TravelinMan1 Re: S.O.S. FROM SAN PEDRO - 12/19/13 09:49 AM
There are two issues here:

1) The Prime Minister got up in arms about the Super Bond at 8% interest. Belize will not pay he said yet he has no problem with the people of Belize paying upwards of 14% on mortgages and loans for business. It is not possible for the average person to get out of debt when they are paying those interest rates on relatively short term loans. It all seems so simply when you are signing the papers but in reality most have no idea what they are getting into.

2) In order to get the loans those people had to have their properties and business appraised and let me tell you that I have seen some of these appraisals and they are out to lunch. Thinking you are doing these people a favor by getting them more money when in reality it simply ensures their failure.

Over the past year or so we have seen these interest rates come down but I think there is still room to improve in this area.
Posted By: AdventurousBooks Re: S.O.S. FROM SAN PEDRO - 12/29/13 08:11 PM
Originally Posted by Loansum-Al K
I get 6.00% interest on my savings account with Belize Bank.


I've talked to Belize Bank (and Atlantic)and they aren't offering anything close to 6%. I know it depends on term and amounts deposited but Belize Bank are quoting well south of 3% and Atlantic isn't far behind. Any suggestions for negotiating better rates? BTW - Loansum, I've PM'd you.
Posted By: TravelinMan1 Re: S.O.S. FROM SAN PEDRO - 12/30/13 10:07 AM
I think the higher interest rates are for Belize dollar accounts and not the USD accounts.
Posted By: tahunt Re: S.O.S. FROM SAN PEDRO - 12/30/13 11:27 AM
Just checking Belize Bank and Atlantic websites, both are 3%. I was intrigued about this when I was there earlier this year. I saw a billboard offering 6% on savings accounts from Atlantic. Not sure how long the billboard had been up but I was wishing I could open an account !
Posted By: Diane Campbell Re: S.O.S. FROM SAN PEDRO - 12/30/13 11:35 AM
To get 6% on USD you need a significant amount of money in a CD.
It requires a meeting with the upper level folks at the bank.
Posted By: ckocian Re: S.O.S. FROM SAN PEDRO - 12/30/13 01:37 PM
And your money will be converted to BZD.
Posted By: champion Re: S.O.S. FROM SAN PEDRO - 12/30/13 02:32 PM
So, if one was to put USD into a Belize Bank and converted it to BZE to gain the 6% intrest. How difficult is it to convert it back to USD if need be?
Posted By: Ernie B Re: S.O.S. FROM SAN PEDRO - 12/30/13 02:53 PM
Depends on who you know.
Posted By: Dane Re: S.O.S. FROM SAN PEDRO - 12/30/13 03:21 PM
Don't plan on succeeding. If it was easy there would be no other banking arrangement here.
The banks have to set rates based on their insurance. There is a clear danger of the Belize Dollar default.
Posted By: champion Re: S.O.S. FROM SAN PEDRO - 12/30/13 03:56 PM
Ok, so no real reply. If I take say 5K BZE to the airport, will it be something they could convert there?
Posted By: Diane Campbell Re: S.O.S. FROM SAN PEDRO - 12/30/13 04:06 PM
Originally Posted by ckocian
And your money will be converted to BZD.


Am told this is not the case at all. Also told you need to have something like $50,000 US or more to begin the discussion.

But then again things change in the banking world very quickly and without much notice.

Posted By: Amanda Syme Re: S.O.S. FROM SAN PEDRO - 12/30/13 04:21 PM
It isn't easy to convert your money back into US. You need an exchange control permit and need to have a valid reason why you want the funds converted. Belize has a limited amount of US currency on hand which is used for the purposes of purchasing goods that are then imported into the country, or to pay off foreign debt etc. So to get a permit citing that you wanted to take advantage of the high interest bearing accounts in Belize dollars and now want to rake in your profits and repatriate your funds overseas might not be a valid reason to get an exchange control permit approved.
Posted By: Philus Re: S.O.S. FROM SAN PEDRO - 12/30/13 05:19 PM
Are there bank / government controls on moving my US $ out of Belize from a Belize US$ account (at Atlantic International Bank)? I know that there was paperwork when I wired US$ into this account.

Is there also a charge (%) for the exchange of BZD to USD with an exchange control permit?
Posted By: champion Re: S.O.S. FROM SAN PEDRO - 12/30/13 05:28 PM
Originally Posted by Amanda Syme
It isn't easy to convert your money back into US. You need an exchange control permit and need to have a valid reason why you want the funds converted. Belize has a limited amount of US currency on hand which is used for the purposes of purchasing goods that are then imported into the country, or to pay off foreign debt etc. So to get a permit citing that you wanted to take advantage of the high interest bearing accounts in Belize dollars and now want to rake in your profits and repatriate your funds overseas might not be a valid reason to get an exchange control permit approved.

Ok, Lets say I won 7K BZE at thr Princess and am flying back to the states and now I want it changed into US Dollars. I have my return ticket and am standing at the booth inside wanting to exchange it. Are they going to or not?
Posted By: Phil Re: S.O.S. FROM SAN PEDRO - 12/30/13 07:47 PM
No problem. Princess deals in US$ for exactly this reason so you won US$3.5k
Posted By: Phil Re: S.O.S. FROM SAN PEDRO - 12/30/13 07:50 PM
For all intents and purposes you can't change Bz$ for US$ unless you know someone somewhere or have a bloody good, one of type reason and then I'm sure there are a ton of hoops and paperwork.
Posted By: Loansum-Al K Re: S.O.S. FROM SAN PEDRO - 12/30/13 08:01 PM
Phil, it's not too hard to find someone to exchange BZ to US.....you'll take about a 10% "haircut" but it's not hard to do at all.
Posted By: Phil Re: S.O.S. FROM SAN PEDRO - 12/30/13 08:04 PM
My above last comment omitted the word "Officially" - sorry.
Posted By: Loansum-Al K Re: S.O.S. FROM SAN PEDRO - 12/30/13 08:43 PM
Correction, I believe I only suffered a 3 to 5% haircut when I exchanged BZ to US.
Posted By: Ernie B Re: S.O.S. FROM SAN PEDRO - 12/31/13 01:23 AM
PM me
Posted By: CaptOneIron Re: S.O.S. FROM SAN PEDRO - 12/31/13 01:30 AM
Well, folks I have actually exchanged quite a large amount of BZ for US and didn't have a big hassle. I let the bank handle it for me and it took a while and the exchange rate was not 2 - 1 but more like 2.025 - 1. This amount was the proceeds I had invested in CD in Belize and I think Amanda is probably right about the permit process etc., but I just don't remember the exact details.
Posted By: Phil Re: S.O.S. FROM SAN PEDRO - 12/31/13 12:58 PM
Well folks. What a surprise. Another been there done that.
Posted By: Dane Re: S.O.S. FROM SAN PEDRO - 01/01/14 11:13 AM
I did this also. I got nicked for an exchange going both ways.
The rate was 2.125 in one direction.
The process took weeks and Atlantic said they wouldn't do it again for me.
I went to Central Bank in the city a couple years later with BZ I got in a land deal. After three trips to the city I quit trying.
Now we have a network. My business friends coming down put the US in my bank with a mailed check and I give them BZ from my local account.
Posted By: joey2angels Re: S.O.S. FROM SAN PEDRO - 01/02/14 03:33 PM
I've got a desk drawer full of Belize dollars...good excuse to return ASAP.

Posted By: CaptOneIron Re: S.O.S. FROM SAN PEDRO - 01/02/14 06:38 PM
Originally Posted by Phil
Well folks. What a surprise. Another been there done that.


What exactly is that supposed to mean?
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