The financial system does not discriminate on the basis of race

Oct 03, 2022 Features / Columnists, Peeping Tom

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Kaieteur News – One of the ways in which political and social leaders control the masses is by feeding them the idea that they are victims. The appeal to victimhood makes it easier for the masses to be led in the direction which these leaders desire.

As such, some leaders concoct narratives of victimhood to make their audience feel oppressed and thus malleable to manipulation. But not all of the victimhood narratives are deliberate. Some leaders spread falsehoods simply because they either do not know better or are living in a cocoon.

One of the false narratives which African Guyanese are being fed is that the financial system discriminates against them. The denial of loans, however, does not constitute discrimination because persons of all races and ethnicities are denied loans.

Persons are also fed the lie that the financial system is stacked against them. This is not so at all. Indeed, regardless of your income or race, you can qualify for loans. Indeed, each month hundreds of ordinary Guyanese do receive loans and other services from the country’s financial sector.

Historically, poor people faced constraints in accessing loans from the formal financial system. This mainly had to do with the lack of or limited collateral and equity and which was used to deny them loans. But it led to perceptions that the banks were placing obstacles on the basis of class.

But things have changed. A range of financial services, tailored to low-income persons are now offered. For example, there are Back-to School promotions that help parents to afford the cost of school books and fees and buying computers for their children.

Many of the promotions targeting low-income persons do not require collateral or equity. Thousands of ordinary Guyanese, of all races, benefit from these loans. Thousands also, of all races, have been able to go to the banks and to acquire a loan to purchase a motor vehicle. Housing loans have been provided to tens of thousands of Guyanese of all races.

And the same holds true for small business loans. Apart from the commercial banks, a number of institutions provide small loans to small entrepreneurs. The government itself has a number of schemes which provide support to small businesses. A Small Business Development Fund has been established. The government hands out millions of dollars each year as grants to persons of all races. Last year alone the government gave out almost G$350M in grants – not repayable – to more than 700 small businesses.

The housing sector is a major source of lending for the financial sector.  The Ministry of Finance is reporting increased real estate loans of G$96.8B and for households by $38.5 billion. The Ministry of Finance reported that the “increase in credit to households was driven mainly by lending for housing, “other purposes”, and motor cars, while the growth in real estate mortgage loans was supported by increased mortgages granted for both private dwellings, and industrial and commercial properties.” It is unthinkable that these increases could have been achieved in an environment of discrimination against a particular ethnic group.

Banks have to make a profit and they have to also be prudent. While there are many promotions which do not require collateral or equity for small borrowers, the banks are in order to demand that those seeking larger facilities should have collateral and should finance part of their proposed investment.

No one should expect to walk off the road and to be granted a G$50M loan without having some asset to lodge. Borrowers must also be capable of repaying their loans. The ability to prove that one can repay a loan does present some challenges, though not insurmountable, for clients of financial institutions.

If you are self-employed, and do not have evidence of your monthly income, there are things which can be done to prove your creditworthiness. One of those things would be to begin to deposit some money every month into your account to prove that you are earning. This makes it easier when you go for a loan because the loan assessor will see proof of prior deposits.

Banks will be fair to you once you meet their lending guidelines. Almost all of Guyana’s financial institutions are staffed by professional persons. It is an insult and a disservice to these professionals to suggest that there is discrimination against any race.

The banking sector is highly competitive. No bank would want to turn away an eligible client on the basis of race knowing that competitors are just waiting to poach on rejected clients.

No case therefore can and has been made about racial discrimination in the country’s financial sector. The numbers do not suggest that credit is being curtailed, much less to be curtailed on the basis of race. The commercial banking system has developed new products suited to the small man and many of these products such as retail loans do not make onerous demands for collateral and equity. The professionalism of the banking staff, and the competitiveness of the sector, act as a safeguard against racial discrimination.

Those who make such charges are therefore either misinformed or living under a turtle shell.  Guyanese must not become entrapped in the victimhood syndrome.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

 

 

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