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23 January 2021

LETTER: High lending interest rates

Wednesday 23 December 2020 | Written by Supplied | Published in Letters to the Editor, Opinion

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"The only meaningful reduction in lending interest rates has come about from our own Government’s contribution towards reducing these lending rate charges ... the banks themselves have done nothing to help."

Dear editor,

During these severe economic times just about every business and every person in the Cook Islands has been adversely affected by this coronavirus downturn.

The only businesses that have not been seriously affected are the banks who have steadfastly retained their excessively high lending interest rates.

I don’t blame the local management and staff for this situation as they are just following the directives and instruction given by the overseas management whose sole aim is to make as much money as they can for their shareholders at the expense of the local Cook Islands people.

The bank managers are judged on how much money they can make from their particular branch and of course this profit largely comes from charging interest on the money that they lend out.

So, there is an incentive for them to keep the interest rates as high as they can for as long as they can.

The only meaningful reduction in lending interest rates has come about from our own Government’s contribution towards reducing these lending rate charges ... the banks themselves have done nothing to help.

The difference between what is given out in interest for deposits and what is charged in interest for loans is excessive compared to almost all other countries in the world.

The banks often give various excuses why their lending rates are so high because failure to do this would be an admission that they are actually charging us too much interest on their loans.

Don Carlaw

Response from Banking Association of Cook Islands (BACI):

BACI is truly appreciative of your (editor’s) thoughtfulness to let us know of the publication of the letter to the editor with full details. 

We encourage our customers and the general community to contact any of the member Banks directly to discuss any areas of particular concern, whether directly impacted or for the interest of the wider community.

In closing, we wish our customers and our communities a safe, loving and blessed festive season. 

Kia manuia

Vaine Nooana-Arioka

BACI Chair