The Jamaica Manufacturers and Exporters Association (JMEA) has strongly chastised local commercial banks for maintaining high interest rates over many years, describing it as “extortionate” and anti-development.
The association said that troubling data reveal that Jamaica’s interest-rate spread nearly doubled the world average between 2010 and 2016. The country’s rate was also higher than that of Barbados, Trinidad and Tobago, and the United States from 2006 to 2016.
An interest-rate spread refers to the difference between interest paid on deposits versus interest a financial institution charges on loans and securities.
The JMEA provided an analysis of the data gleaned from the International Monetary Fund’s International Financial Statistics, presented in detailed graphs.
“While we are fully aware that interest-rate spreads across countries will differ due to bank-specific and macroeconomic variables, these revelations are, nonetheless, alarming and disheartening and lead the Jamaica Manufacturers and Exporters Association to question the reason behind these extensive margins,” the JMEA said in a press release yesterday.
It continued, “Local commercial banks, especially, seem to be more interested in boasting double-digit increases in revenues and net profits but demonstrate blatant disregard for the development needs of the country.”