Christmas loan specials from microfinance institutions are still being rolled out this year, but borrowers, especially those seeking personal credit, should expect less than half of the value of specials that were trending last year.

Small businesses can snatch a deal, but must be prepared to put up assets as collateral.

The more conservative shift within the otherwise easy-going, high-risk payday loans market comes as microlenders across Jamaica adopt measures to minimise the risk of repayments going bust, under the pandemic and the economic crisis it has spurned.

Small businesses and jobs have been hit hard during the spread of the coronavirus – areas that microlenders need to do well in order to keep demand for loans up, repayments steady and business revolving through their doors. For example, unemployment dropped five points back into double digits, at 12.6 per cent in the most recent jobs survey in July; and the economy has shrunk by around 10 per cent since the pandemic.

Year after year, Christmas loan specials from microfinance companies have included deals of up to $5 million, sometimes more, with repayment periods of around five years. But with COVID-19 uncertainties still lingering, some lenders have slashed loan values by as much as 70 per cent and shortened the repayment period for borrowers.

http://jamaica-gleaner.com/article/business/20201204/expect-smaller-loans-fewer-specials-christmas