$2.5 million and counting
Big Bucks disbursed in party loans this season
The dream has certainly now become a reality, when many look back and calculate just how much they have spent for 'Emancipendence' week.
Fancy clothes, new hairstyle, all-inclusive accommodations and season armbands are just some of the expenses that one can anticipate in order to party in fine style.
The hefty price tags attached to these events have led many to seek financial assistance from microlending loan agencies such as Sprint Financial Services Limited.
According to founder and CEO Christopher Barrett, upwards of $2.5 million (still tallying) in loans were disbursed to partygoers, a whopping 56 per cent increase from last year. The company offers loans to partygoers who find it difficult to foot the upfront cost for armbands, hotel accommodations, transportation and other miscellaneous expenses.
"On average, we disburse $30,000 per person for a loan. The funds are then reimbursed through salary deductions, and 50 per cent of our clients have opted to use guarantors in order to secure loans. On average, it takes about four months for individuals to repay, but the longest time allotted for a loan to be repaid in full is eight months," Barrett told The Sunday Gleaner.
Though not willing to divulge the exact interest rate charged, Barrett conceded that it is somewhere in the region of four per cent to six per cent. He added that Sprint Financial uses a special formula to determine who gets approved for a loan and the lending amount.
One of the most popular party series in the island, Dream Weekend, which ran from August 5-9 in Negril, could cost an individual the tune of $31,000 for a season band. SPF, which takes place in Ocho Rios, costs about 25,000, and Flex Week, which is held in Kingston and Portmore, costs approximately $10,000.
Though it is widely believed that the majority of clients of lending agencies are from the lower socio-economic bracket, Barrett vehemently denied this.
"Typically, our clients are in the middle- to lower-upper-class bracket, but mostly from the middle class. For this particular season, our client demographic ranged from 22-35 years of age, with 58 per cent of this being females. I don't know why this is so, but it's mostly females who gravitate towards the loans. Also, while we do have some students who apply for loans, it is mainly young professionals who are applicants," he said.
Kamal Bankay, one of the promoters of Dream Weekend, divulged that this year's staging of the party series was the biggest to date.
"We have grown incrementally each year. We have not finished our tally, but I would say we had between 15,000 and 20,000 patrons this year. Also, based on our online sales, about 60 per cent of these patrons were international visitors, and our local partygoers comprised the other 40 per cent.
Bankay also expressed his views on individuals who use lending agencies to fund their entertainment needs.
"Individuals all across the world use their credit cards to finance recreational activities. So, in essence, this is a similar situation. Not all individuals will be able to access a credit card, so microlending agencies are the next best thing for these individuals," he said.