Old debts hurting new prospects
The business environment in Mandeville, Manchester, is tough, according to Christopher Samuels, manager, personal banking at Scotiabank, Caledonia Road branch. But things are looking up, with a lot riding on the reopening of the Alpart bauxite plant at Nain in neighbouring St Elizabeth.
Scotiabank is seeing an uptick in applications for personal and commercial loans, with most of the latter related to the purchase or completion of town houses and apartments outside of the Manchester capital.
"You have a number of persons who had incomplete construction, which they are seeking to complete now - apartments that they want to have ready just in case persons want to rent. So persons are looking beyond Mandeville, expanding their businesses in preparation for the spin-off of what the Chinese will do with the bauxite industry. Some persons are positioning themselves," he told a Gleaner Jobs and Growth Forum at the Mandeville Hotel on Monday.
Following the purchase of the plant by Chinese company Jiuguan Iron and Steel (JISCO) from the Russian firm UC Rusal, residents of neighbouring communities have been buoyed by the promise of thousands of jobs from the establishment of an industrial zone. Upon completion, it will comprise bauxite mines, an alumina refinery, a coal-fired power plant, a local electricity network, rolling wire mills, and a range of aluminium products, among other enterprises.
In July, the Government promised that at least 700 jobs would be created by this month, with at least another 3,000 over the next four years as a direct result of the US$2 billion investment. In addition to this direct employment, Manchester residents are looking to cash in on the anticipated windfall from the 200 Chinese workers from overseas, as well as designers and contractors.
CREDIT BUREAU REPORTS
However, many persons are facing a challenge from an unexpected quarter: information from the credit bureau reporting system.
"The advent of credit-bureau reporting is affecting persons so negatively," Samuels disclosed. With credit history now open to scrutiny by financial institutions from which persons seek loans, some old bad debts are coming back to haunt potential borrowers."
The Scotiabank executive explained that many loan applicants are only now finding out just how badly those long-past delinquent accounts with institutions such as the Government's student loan facility or competing banks can really hurt them.
"Some persons believe that they can just forget about a debt, but it doesn't work that way anymore. Before, banks had to be following a customer, calling about their bad history, and coming to a compromise settlement. But we find now that persons are becoming better aware that the credit report is following them. Persons are more inclined to seek to settle them, even though it may be 10, five years ago."