Omar Anderson, Staff Reporter
THE FAILURE of some farmers to repay loans, plus the effects of the recent drought, have combined to cut into the cash flow at several People's Co-operative (PC) Banks islandwide.
At least two administrators of PC banks said their institutions have been feeling the pinch of the farmers' delinquency.
"A lot of them (farmers) weren't able to pay (their loans) on time because of the ravages of the drought (on their crops)," explained Audley Walker, manager of St. Thomas Ye Vale PC Bank in Bog Walk, St. Catherine.
He told The Sunday Gleaner last week that several farmers lost crop and livestock due to the drought and that his bank had since extended the credit period for farmers, some getting up to a year extra to pay. Mr. Walker also said delinquency rate is 20 per cent, which he described as high based on the bank's own standards.
"It (delinquency) rate has been rising from over the past six months, a large portion due to the inability of farmers to pay on time," he said.
The St. Thomas Ye Vale PC Bank has 2,000 members who, together, have 600 loans totalling $45 million.
Matthew Clarke, manager of the St. Thomas PC Bank, in Golden Grove, St. Thomas, last week described the current situation as chronic.
"The drought has played havoc with the farmers and because of that they have not been repaying and that has caused us to be collecting less," he said.
A total of 1,000 farmers have taken 1,416 loans from the St. Thomas PC Bank, totalling $60 million. Mr. Clarke said that, like other PC banks, his institution might be forced to extend the loan period for farmers. He added that the delinquency rate at the bank is currently 20 per cent, which he described as being unacceptable.
"If you have a portfolio and 20 per cent of it is in arrears, that is bad," he said.
