Do Barbados Banks Favour Whites Over Blacks When Making Loans?

And If The Banks Favour Whites Statistically – Is It About Race Or Ability To Repay A Loan?

The Barbados Bankers’ Association has heard the complaints, and now say they want proof.

Let’s see what BFP’s readers have to say about the situation.

Here is the article in The Nation News, and the comment section is open…

Bring Proof!

ONE OF THE ISLAND’S LEADING BANKERS is challenging those who accuse banks of continuing to favour Whites over Blacks when lending money to bring proof.

“I would like someone to back it up with actual hard stats because I don’t think it will show that that’s the case,” said Oliver Jordan, FirstCaribbean International Bank’s Barbados head as he fielded questions on the bank’s 2006 performance at a Press conference at the Rendezvous branch yesterday morning.

“There may be some historical issues, which one must accept in the society that we’ve come from, but certainly the fact of the matter is that I can’t think of any bank for that matter, and I would say so broadly, that would prefer to lend to a black person rather than a white person.

“Really, you look at the customer coming in, you look at the risk, and you make an assessment, plain and simple.”

… continue reading this article at The Nation News (link here)

A Barbados Free Press Reader Says…

Regular BFP’er “Reality Check” posted the following comment. We think its worth sharing… 

Bankers traditionally want to lend to people and companies who don’t necessarily need or want their money. These people and companies get to negotiate how much they want, how much they will pay and on what terms. They got there over many years of discipline of paying back their loans on time and having built up a good credit rating.

International Bankers want to loan to countries because even third world countries are perceived as being less risky than many corporate and individual loans.

We know, in fact, that the economy of many third world countries in the past have been such that these countries can’t afford to pay back the principal let alone the interest. The international bankers don’t care because they have sold off their loan to customers and taken their fees. Then they get fees to renegotiate the reconsolidation of these loans. This includes the bankers such as Deutshe Bank who are currently lending money to Barbados for CWC etc

All other people and companies are at the mercy of the banks because you have to have capital to succeed or run any venture and they know it. Attitude and friendliness completely change under these circumstances.

I know of several small Barbadian businesses, even though the banks are well secured, that make their clients go through the hoops two or three times a year for completely unnecessary hassles.

People can’t even imagine how difficult it is if you are poor or never had money in the family, to pull yourself up by the bootstraps and go through the horrific exercise of trying to borrow money and run a business in any economy let alone a small island economy. A lot of the answers lay in the issue of education and proper role models.

It is difficult to succeed when your elected role models are siphoning millions and millions of Dollars from the treasury on poorly conceived and badly executed programs, such monies that only line their own pockets and will only have to be written off by the people of Barbados.

Maybe Barbadians should be electing persons who have integrity, accountability and transparency as part of their credit past and not persons who tell them what they want to hear and how they too can attach themselves to the trough.

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24 Comments

Filed under Barbados, Business, Culture & Race Issues

24 responses to “Do Barbados Banks Favour Whites Over Blacks When Making Loans?

  1. God Bless David

    That’s ironic – Oliver Jordan is clearly one banker who favours whites…he’s married to one! LOL! (Sorry Oliver!)

  2. Jerome Hinds

    Oliver Jordan was also a one-time appointee of Noel Lynch….on the BTA….BOARD…!!!

    Jordan’s….comments…serve a PURPOSE…..!!!

  3. Just asking

    Another black Uncle Tom.
    These flunkies jump to explain rich white men position so quickly Bizzy and the real money men must marvel at how divide and conquer works so well.
    Jordan was a former cigar smoking lackey of Lynch.
    Yes GDB he married white.
    I wouldnt believe anything this Oliver boy says.

  4. Get In The Action

    So just because he married a white woman he’s going to open the bank vault to all whites. Come on!

    Fact of the matter is that 5 of the 6 banks in Barbados are run by black CEOs and almost all of the branches are run by black managers.

    Money has no colour. Go with a good business plan and a good track record, and as Oliver said in the press conference they evaluate the risk and make a positive decision.

    It amazes me that all of this talk about preference comes from a group who have failed time and time again in business and still expect the banks to dole out the cash. Why not ask successful black business men like Harold Hoyte, Ralph Taylor and Peter Odle if they have problems sourcing financing for their projects.

  5. reality check

    Bankers traditionally want to lend to people and companies who don’t necessarily need or want their money. These people and companies get to negotiate how much they want, how much they will pay and on what terms. They got there over many years of discipline of paying back their loans on time and having built up a good credit rating.

    International Bankers want to loan to countries because even third world countries are perceived as being less risky than many corporate and individual loans.

    We know, in fact, that the economy of many third world countries in the past have been such that these countries can’t afford to pay back the principal let alone the interest. The international bankers don’t care because they have sold off their loan to customers and taken their fees. Then they get fees to renegotiate the reconsolidation of these loans. This includes the bankers such as Deutshe Bank who are currently lending money to Barbados for CWC etc

    All other people and companies are at the mercy of the banks because you have to have capital to succeed or run any venture and they know it. Attitude and friendliness completely change under these circumstances.

    I know of several small Barbadian businesses, even though the banks are well secured, that make their clients go through the hoops two or three times a year for completely unnecessary hassles.

    People can’t even imagine how difficult it is if you are poor or never had money in the family, to pull yourself up by the bootstraps and go through the horrific exercise of trying to borrow money and run a business in any economy let alone a small island economy. A lot of the answers lay in the issue of education and proper role models.

    It is difficult to succeed when your elected role models are siphoning millions and millions of Dollars from the treasury on poorly conceived and badly executed programs, such monies that only line their own pockets and will only have to be written off by the people of Barbados.

    Maybe Barbadians should be electing persons who have integrity, accountability and transparency as part of their credit past
    and not persons who tell them what they want to hear and how they too can attach themselves to the trough.

  6. Justasking

    “Just asking” suggest you take another name. I am justasking so other posters won’t get confused.

    Thanks.

    Justasking

  7. Justice

    All things being equal, a bank would be crazy to discriminate in respect of a loan on the basis of skin colour. But all things are rarely equal and perhaps a well-dropped name or affiliation might count for something…sometimes. Colour may therefore be incidental at best.

  8. anon

    does justasking come up in anyone else’s name box? It does in mine. Hackers at it again it appears.

    Why do we keep fooling ourselves that banks are colour blind when in their lending and financing policies. It does not square with the facts.

    A clear example was Rawle Brancker’s ding dong battle with Bank of Nova Scotia about their lending policies. I respect Brancker and what his company achieved.

    His company appears successful .He has no colour axe to grind. So why was Brancker frustrated with the banks? Branckers ordeal was real. He had guts to make it public too.

    Branckers story is at odds with the rubbish Oliver Jordan, Courtney Blackman, Get In Action, Cheltenham etc and of course Bizzy Williams would have us believe.

    Brancker if you reading BFP give us a recap.

  9. Fair Play

    Just about everybody working in and running banks in Barbados these days is black. Are you seriously telling me that they all discriminate against black applicants? Are you saying that if the white heads of foreign banks had a policy of discrimination against blacks that this would not be leaked and be instant headline news? Give me a break! banks lend money where they have confidence that the loan will be repaid. Any time something doesn’t go the way that you want it … wait on it … wiat on it … its because I’m black! Its a great excuse to use every time.

  10. Jupiter

    BFP

    I am just checking in after a break and I have to tell you I feel as though I am a child who has been given a bag of candy.

    These entries seem so interesting – like the child with this bag of candy – I just don’t know which one to open first.

    From banking,to media,to politics,to caricom scandal,to health matters – and what makes it interesting for me is – that they can elicit some very serious discussion.

    Do some more digging on the caricom software theft one – you may find a big -up bajan name somewhere there.

  11. Red

    Banks used to, years ago, make lending decisions more on perception. Colour would have definitely played a role in those perceptions.

    However, the banks now have Credit Risk Managers and ultimately report to Credit Managers to the overseas parent companies (be it Toronto, Trinidad, or Bermuda).

    In order for an application to proceed, a series of ratios are calculated and the decision to grant the loan is based on (1) positive ratios, (2) adequate security, and (3) the ability to repay the interest (or principal plus interest).

    In this way, the human factor is reduced to a mathematical process. It is this process that makes many loans harder to obtain. New businesses, especially upstarts with no history, cannot give comfort on cash flows, and usually have inadequate security. In this way, they are obligated to borrow at higher rates from “risk institutions”, such as those Equity firms, or from a venture such as the BYBT. Those that cannot afford the higher lending, or do not want to lose control to those Equity firms, end up not starting at all.

    There was a time when banks would take the equipment and receivables of a firm as security. Now, they ONLY accept cash and real estate; they don’t even accept public shares anymore.

    Another aspect to consider in the application process is the lending officer. They also rely on those same ratios on the applications to justify the loan going forward. They are not going to let a risky application to go forward because they could lose their job for bad decision-making. Statistically, some good prospects will fail, but as long as the ratios were calculated correctly, they have covered their position (or posterior).

    I don’t believe they would be able to justify a bad debt by saying “But he was White”, or “But he was Black”.

    However, where colour gets brought into the situation has more to do with social standing in society than anything else. The ratio process can get bypassed when you can convince your peers that you need the loan. If you play golf with the VP or MD of a bank, you may be in a position to use that relationship to get a loan the avoids the regular channels. Of course, the small black individual setting up a hair salon likely doesn’t have a golf membership at Royal Westmoreland. But the Local golf membership at RW has a fairly even mix of colours. In this way, it is social status that differentiates us, not colour.

    But again, it is easier to see colour as a difference and to use the race card in furthering an agenda.

  12. Get In The Action

    Well said Red!

    Isn’t it interesting that issues of colour are brought to a boil every 4 or 5 years around election time. It’s like clockwork. The handlers in both parties seed it out and we play to their Agenda.

  13. BK

    Although the playing field has leveled there is no doubt that “successful white businesses” can more easily get loans in the banking system today. A lot of it has to do that whites are “wired” for success. By that I mean that whites help each other to survive succeed. Bankers will always toss out certain risks for this reason. Don’t forget that head office on the ground in Barbados have limits where they are permitted to exercise wide discretion because they have a knowledge of the market. We can talk about the ratios and the several risk approaches used by banks today but the reality is that financial statement/Business Plans can be tweaked to pass the test every time.

    Now tell me if a white man visit a bank manager to get finance for a start up and he said Bizzy or Derek Foster are equity partners or have some minor interest what do you think will happen?

    I was privy to a conversation last week an white investors on a project soon to be announced will receive a sizable loan simply on track record; they are offering no collateral except what they are borrowing the money to finance.

    Lets get real man!

  14. De Orginal

    Oliver Jordan is a political flunkie what u expect from he.

  15. John

    The qualities that build a stable, successful family also build a stable, successful business.

    My guess is that Williams Industries may soon self destruct!! …. that sounds wutless, I know, and I don’t wish it on them. I am just following my logic to its end.

    What might save them from the natural end is money, influence and power. Perhaps this is the second level of success, after the family has exerted itself.

    Look at the successful businesses. They invariably have one or more successful families at their core, doesn’t matter if they are black, white, …. or Indian.

    An entrepreneur is the product of watching, waiting, experiencing, trying, failing, etc. etc. ….. and all these activities naturally occur within the confines of a strong family. The world is not going to give that entrepreneur a chance, but a family will.

    We like to ascribe this to colour but they are more related to the ability to build a family, which is far tougher than building a business.

    It is only a few successful families who can also build a successful business.

    BS&T is now a public company, a conglomerate which is never linked back to the six families which formed it, I believe in 1917.

    Each of those families were in business for perhaps a couple of generations, in the case of the Dacosta family, since the 1860’s.

    It just happened that they reached a position where they could make it to the next level and combine their resources.

    This is the exception, not the rule.

    Goddards has a couple of generations under its belt as a family company before it made the next step.

    These are just two companies whose origins which go back over 100 vears. But think of the number of perfectly successful families that were built in this period. …. and only two really successful businesses.

  16. Dave Crawford

    Time and time again the horror stories are told of black entreprenuers who would submit business plans to bankers with the hope of getting funded only to be rejected and then see their same idea being funded later on by the same bank that originally refused financing for their idea to to a group of white individuals who no doubt stole the idea but yet the whites get the funding. .
    Anyone who thinks that race and access to capital dont go hand in hand in Barbados is living in a sad state of denial.

  17. reality check

    Dave Crawford

    we have all heard of the “teifing” of peoples businesss plans and efforts to try and make their dreams come true only to be taken and stolen by the people they entrusted with their ideas.

    Yes there are some very unethical and well known white or quasi white charlatans and lawyers who partcipate in this behaviour but they do so with the active participation of their black and coloured brethern and a legal system that is not based on fundamental principles of equity but rather who you know and who you pay.

    We have to elect people who have integrity and insist on transparency and fairness across the board.

  18. Red

    BK

    You have to look BEYOND colour.

    You’re right, if Bizzy or Derek Foster were named as interested parties, there would be positive consideration from a bank manager.

    But, if you named Ben Arrindell, Everson Elcock, Rawle Brancker, or Ralph Taylor as interested parties, the bank manager would also give positive consideration.

    Again, it is not because of their colour but because of their social standing and that they operate in the right social circles.

  19. anonymous

    Red look Rawle Brancker had big fights with the banks..okay. Where you live?

    Bizzy at it again today. Saying he said some not all black people look for hand outs. Where does this imbecile get off..?

    He insults all black Bajans now comes with the explanation of a six year old moron.

    It begs the question..how Bizzy become a successful businessman in the first place..? You guessed …it was his col…onge. Yeah right!

  20. Red

    Anonymous,

    You are arguing in past tense.

    As you said, RB “HAD” big fights with banks. Past Tense!

    Where I live? In the Present.

  21. anonymous

    Red,

    Hell yeah you live in “present” thats where sweets are for white elite who make millions off government contracts funded by majority black taxpayers…these mutimillionaires then have the cohenes to turn around and say blacks looking for handouts.

    our past was slavery… we never going to forget that although your kind wish us to. Never again are we forgetting our history. The PEP view of the banking situation and control of economy is bang on.

  22. Anonymous

    What about all the rest of the whites in Barbados…you know the ones no one seems to want to acknowledge? The ones working as secretaries and photocopier salesmen and mechanics?
    You think they getting by off of money from gov’t contracts too?

    Please plenty people trying to get by in BIM.

    The social status of people is the biggest divisor in our island…not colour.

  23. The writers so far have concentrated on businesses and accessing loans from banks, especially Scotiabank. What about the working poor, who find themselves working in the civil service for over 30 years, have tried to put a roof over their heads and purchase a little car to get their daily duties done. Who also find problems putting healthily food on their tables and having to juggle bills each month? The banks do not want to see you – especially at that age! They would not even allow you the benefits of a $500 credit card despite your begging or pleading. “Class” is what the banks are dealing with, not necessarily “colour”.

    What is ironic is that they lure you into their trap when you are young, you stay with them believing yourself to be a valued customer to them, ever so often they invite you to come in a “get financial help” or “balance your life with your finances” but as you get older (50+) you realise that you no longer matter because they regard you as having been expired. You are then left in a rut, unable to repair the said home, you may have to sell the car and ask friends to help you put some food on the table. In addition, if you want to approach another financial institution to take a chance at getting some assistance, your bankers threaten you with exposure of “bad history” and guarantee you that no other Bank will give you the time of day!

  24. D. Drepaul

    Banks are not charitable institutions. They’re in business to make profits and keep afloat. They would be indiscreet and unwise to make loans to persons who have no tangible means of repaying–with interest.
    ‘Do-gooders’ in the US forced banks to give loans to persons who were in no position to make the repayments with interest. Result? Thousands of foreclosures and a drag on the economy.