Norman GrantAGRICULTURE CONTINUES to receive the bulk of the loans disbursed by the People's Co-operative (PC) banks, with nearly 90 per cent of the $1.2 billion loan portfolio up to May 2002, going to that sector.
Government Senator Norman Grant made the announcement in the Senate last Thursday, during his contribution to the State of the Nation Debate.
He said the loan portfolio for PC banks had moved from a mere $200,000 in 1994 to the current $1.2 billion, an indication of the confidence shown in the institutions.
He explained that the increased activity at the banks was largely due to the rationalisation programme which has seen the number of banks slashed from 116 to 12 in the last seven years.
The main objectives of the programme were to:
Ensure sustained economic growth within rural communities.
Address the financial needs of small and medium-scale farmers and non-agricultural producers.
Upgrade wages and benefits to attract and retain qualified staff in the PC banking system.
Improve communication between banks.
Raise the loan/equity ratio
through the mobilisation of rural savings and the injection of equity capital.
According to Senator Grant, most of the objectives were met at the end of the period.
The level of savings now stand at $450 million, a massive jump from half-a-million dollars eight years ago. "This has been achieved with 70,000 accounts from the 90,000 members. This achievement is a testimony to the success of the institution and the confidence which our farmers have in the banks," Grant said.
He disclosed that remittance through PC banks during 2001 totalled $1.7 billion from 286,476 transactions processed. The average size per transaction is US$120. This, Grant noted "underpins the absolute importance of this institution in rural communities".
He said: "PC banks have become one-stop centres for many financial transactions offering rural people the convenience available to city dwellers and contributing positively to the improvement in rural existence so badly needed to discourage urban drift".
