Dionne Rose, Parliamentary Reporter

Opposition Spokesman on Finance, Audley Shaw, is again calling on the Government to have the Students' Loan Bureau (SLB) reduce its interest rates on loans to single digits.

Mr. Shaw made the appeal in the House of Representatives on Tuesday while endorsing a resolution that will see the SLB receiving a loan of $1.7 billion from the Jamaica Bankers' Association.

Mr. Shaw said that while the SLB gets loans at a reduced interest rate, it refuses to pass on these lower interest rates to borrowers.

"In fact, the Students' Loan Bureau has tended to keep its rates of interest, I would like to say, artificially high," he said.

The loan, which was approved by the House, is being offered for a period of five years and is to be repaid in nine instalments at an interest rate of seven per cent.

But Mr. Shaw wanted to know why the SLB continues to maintain its interest rates at 12 per cent when loans such as the $1.7 billion were in single digit.

Not low enough

Just last month, the SLB slashed its interest rates on current loans from 16 per cent to 12 per cent, but Mr. Shaw said this was not low enough.

"From seven per cent to 12 per cent the student must now pay and what you coming to tell them, well, you use to pay 16 per cent so you getting 12 per cent now, that is a four per cent reduction, so you hug it up!" said Mr. Shaw.

In response, Minister of Finance, Dr. Omar Davies, who had moved the resolution earlier, said students' loans were different from other loans.

He said that loans are being granted for a period of four years or more without any servicing on the loan and as such this puts a drag on available resources.

"Mr. Speaker, I want to say to you, yes, we wish to make the interest rates as low as possible, but at the same time we don't want to make the institution bankrupt," he said.