By LETRE SWEETING
A TOP financial expert called for Bahamians to save their money and stay away from frivolous borrowing.
Gowon Bowe, Fidelity Bank’s CEO, agreed with Transport and Housing Minister JoBeth Coleby-Davis’ statement made on Thursday that there needs to be a public shift concerning financial prudence. Mrs Coleby- Davis made the comments as the government granted six Bahamians with keys to new homes.
Mrs Coleby-Davis also said that each customer service agent at the Housing Department is overseeing about 300 applications for those needing new homes.
In view of these statements and an estimated average of some 30,000 consumer loan applications a year, Mr Bowe said Bahamians should not allow consumerism and “immediate gratification” to drive financial health and financial decisions.
“I’m probably going to say that the average consumer loan in the country is somewhere around $30,000, possibly even $40,000. You’re probably looking at somewhere around 30,000 applications per annum. Divide that by a month, you know, probably 2,500 a month,” he said.
Mr Bowe said Bahamians should be more careful with their money and really consider whether it is appropriate to incur debt for certain items.
Mr Bowe said that though debt itself is not a bad thing, it could become a very dangerous tool when prioritising luxury items as opposed to more productive ones.
“It isn’t something that should be considered evil. But it is a very dangerous tool, if it is not (done) with very deliberate focus. By that I mean that if we are going into consumer debt for vacations, for Christmas shopping for, shall I say, debt to consume immediately and have no intrinsic value going forward, then you have to be really capable of handling that repayment amount that is going to be attached to your earnings on a monthly basis,” he said.
“If we are borrowing for what I’m going to call luxury items, and that’s all for fun and enjoyment and it is not a very low monthly payment, we should ask ourselves should we be incurring that cost? Should I be borrowing to go on vacation? Or should I be taking more of a relaxing time in my homeland.”
Mr Bowe said, “But if you are borrowing consumer loans for what I’m gonna call productive use, some persons may borrow to buy a vehicle that vehicle used to transport them to work and in order to do household projects, if you are borrowing for educational purposes, so you either yourself or your children are reaching your standard of education, these should be seen more as investments.”
He also said, “Only borrow for what is necessary, and what you are comfortable in paying. And in some of the circumstances, unfortunately, what we see is persons who are borrowing and actually have no assets to show for it at the end of the day, and only have a monthly obligation to repay. And those are the circumstances when people are more minded to walk away and really put themselves in greater problems.”