AID Bank increased loan issuance in 2010

The AID Bank. * Photo credit: Invest Dominica Authority

Prime Minister Roosevelt Skerrit said the Dominica Agricultural Industrial and Development Bank (AIDB) have recorded a significant increase in the issuing of loans, the highest in the bank’s history.

PM Skerrit said over $41.2 million were issued in loans for the year 2010.

“We have helped in a number of areas, whether it’s in construction, tourism, agriculture…one of the biggest projects the AIDB is financing is a major resort in the north of Dominica,” he said.

He said the loan approvals they made in 2010 would have created in excess of 800 jobs in the economy.

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11 Comments

  1. Hey just giving my two cents
    January 5, 2011

    The Internal working of the AID Bank need to be looked at. The reason I am saying that is I know persons who pay their loan on time and they are always in arrears or have to pay late fees. Probably AID Bank or someone should come and explain how the loans work viz a viz the repayments and how and when late fees are paid and how can one get into arrears whenthey pay on time.

    • Dominichey
      January 6, 2011

      Well there are many things at play. Maybe the person loan due date is different from the date in the banks system. Late payments are often automated. In that case they would need to be adjusted. Many times employers may send in deductions late and the payment are posted accordingly that could be an issue. Also it depends on the type of loan that the person have with the bank. If they are on one of those student loans then that is not very complicated but I do not think it is well explained or understood. Eg. John would take a loan for his son to go study in for $50,000 and he agrees to pay the interest on the loan. John pays interest for 4 years and when his son comes back he now finds that his son is paying a loan of $50,000 plus interest. Most people think that is crazy but what he was paying for the four years was a sort of used fee based on a percentage of the total amount. That payment does not contribute to the reducing the original amount of $50,000. So when the son starts paying the full loan it operates as any mortgage, the interest consumed the larger part of the payment and the rest goes towards reducing the actually $50,000. This will be the case for at least the first three (3) year before there can be any significant effect on the original $50,000. Give me a specific situation and I will try to clarify it for you based on my banking knowledge.

      • Hey just giving my two cents
        January 6, 2011

        Very good explanation from you. but I am speaking about when as a monthly paid employee and the deductions come in as a regular deduction by the 25th of the month -actually a few days before the loan payment date and that individual was always being told that they had to pay late fees and to add more insult to injury, then the loan came into arrears. it was a straight loan , not one that had the interest waived for a few years. Nb the individual never missed a payment and it baffled me.

        I am very pleased with you “Dominichey” as you seek to clarify and educte persons. I wish that more person would see the need to do so and stop being rude and disrespectul.

  2. Anonymous
    January 5, 2011

    then the deck of cards will start falling when people are not able to pay off loans considering the high interest rates and the bank will have control of all that the people have invested in…i think this was one of the reasons that the U.S economy crashed and people lost their homes and property…and i said ‘one’ of the reasons

    • REALLY?
      January 6, 2011

      Two things. (1) Everyone is cognizant of the interest rate prior to signing their loan documents. Plus i would like to believe that the business people do a business plan so they will know whether they can afford the loan. If things do not go as well as they anticipate and they cannot pay I do not think the bank should be blamed.

      (2) Why not say that the businesses will do well and DOMINICA will benefit. Why be a pessimist.

    • Dominichey
      January 6, 2011

      Actually that is not one of the reasons. One of reasons was graduated interest rates and reselling of mortgages. Often time persons do not read or understand the concept when securing a mortgage. Many persons over burden and stretch themselves very thin with credit. So what you found is that the loan payments were often in the maximum and left no room for contingencies. After one to three years of paying the loan successfully the graduated interest rate kicks in and they can no longer make the loan payments. They default and the mortgages are sold to third parties whose sole interest is collect , repossess , flip and resell.

  3. Propaganda Detector
    January 5, 2011

    Can anyone give us the history of the Aid Bank, how it is funded, how to loans are made and to whom? How is the bank a branch of the Government? Please tell us about the operations. I am a loss at to the reason the PM should take credit for the operations of the bank as indicate in his statement “We have helped in a number of areas, whether it’s in construction, tourism, agriculture…one of the biggest projects the Aid Bank is financing is a major resort in the north of Dominica” Pardon my ignorance I just need to be educated. Anybody please?

    • Dominichey
      January 5, 2011

      The Dominica Agricultural Industrial Development Bank (DAIDB) is a Quasi Government Bank. The last time I check it has two majority share holders, which was the government of Dominica as majority share holder and the Dominica Social Security. Oh and Guess who owns the DSS?? The Government. The AID Bank had its origins as part of what we know as National Development Bank. However some time ago I cannot recall the date, the government of the day thought it best to separate the AID bank from the NBD to allow for a focus a focus on development related projects as opposed to commercial banking. The AID bank is funded in part by the Government of Dominica, Dominica Social Security, Caribbean Development Bank , European Development Bank (but I am not sure if that is the case still as the EU rates made it expensive in repayments) and recently the Alba I think . Also, the government of Dominica is the guarantor to the loans from the funding agencies. So in effect the PM is within his right to make those statements as the Government is the major share holder, guarantor and donor of the bank.

      • Propaganda Detector
        January 5, 2011

        Thanks!

        • Hey just giving my two cents
          January 5, 2011

          You see the Propanda Detector was not au courant with the AID Bank and he was not ashamed to say so. He humbly asked someone to educate him.

          My good friend “Dominichey” quickly came to his rescue and immediately gave a synopsis of the AID Bank. My other friend “Propaganda Detector ” was very grateful for the information and said
          “Thanks!

          This is the way we should go. If we do not know something rather than saying things we cannot substantiate or things we donot know about , then we need to get knowledgeable so we can make good and objective comments and take part in the discussion for the betternent of our country.

          Forward we go 2011!

  4. Vroom
    January 5, 2011

    Ok good. But yáll need to lower your interest cause awa wi.It bossing heads.

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