Jamaicans emigrate instead of paying debts

A senior financier in Jamaica’s banking system says “emigration and unexpected expenses” are the two main reasons people default on their monthly loan payments. An increasing number of Jamaicans are defaulting on their monthly term loans, but the Central Bank says it is not a cause for concern just yet.

The data in the figure are overdue loans, that is, loans that have not been repaid for 30 to 89 days.

people migrate Every year, more and more Jamaican immigrants are forced to borrow money from banks with no intention of repaying it, which has become a headache for the banking industry. While we know that debts don’t magically disappear just because a person moves, debt collection does become more challenging for creditors if you leave the country. Since each country’s credit system and regulations are different, it is difficult for creditors to track down immigrants. The report pointed out that at least one group of Jamaican immigrants is more responsible than others, but declined to name them. In total, immigrants listed as overseas residents owed a total of $6.8 billion in repayments in March. This accounted for about 15.8% of the total amount for that month. Later data showed that this figure had increased to $10.2 billion in May, accounting for about 25% of all overdue repayments.

Banking industry insiders across the country said the growth in overdue loans has been controlled as financial institutions keep a close eye on outstanding loans and follow up with reminders via emails and phone calls within a few days of a loan becoming overdue.

The introduction of credit bureaus in Jamaica has also helped, as has people’s awareness of the damage non-payment can do to their credit record and the impact this can have on future loan applications.

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Overall, “the stock of these loans on the balance sheets of depository institutions grew by 32.1% from $32.5 billion in March 2023 to $42.9 billion in March 2024,” the central bank said. Further data showed that overdue loans rose again to $50.1 billion at the end of April before falling to $41 billion at the end of May.

but Bank of Jamaica The BOJ said the increase in overdue loans must be viewed in the context of overall loan growth at the country’s eight commercial banks and one commercial bank. From that perspective, the ratio of overdue loans to total loans “rose slightly to 2.96% as of March 2024,” the central bank noted.