BoJ data shows more loans going under

The Bank of Jamaica (BoJ) released data on Monday, showing the extent to which loans are souring as incomes fall in the weakened economy. 

Several loans taken out in better economic times are now souring on the books of financial institutions. 

Financial institutions reporting to the BoJ said that at the end of June, they had $20 billion of loans on their books which had not been paid for at least three months. 

That has forced the finance houses to classify those loans as "non-performing". 

The $20 billion of non-performing loans banks were carrying on their books at the end of June, is a 40% jump from the levels they were a year earlier.

Every loan from mortgages to private loans, even commercial loans, were affected as businesses went under in a tough economy and consumers, who lost jobs or suffered pay cuts, were no longer able to service their loan obligations. 

The reality has been forcing the financial institutions which made the loans in the first place to be finding increasing sums to help offset the effects of delinquent borrowers. 

At the end of June, a total of $14 billion was set aside as provisions for loan losses, a 36% in one year and was enough money to cover 70% percent of the loans that were not being serviced.    

In the meantime, the BoJ’s data also show that Jamaicans are saving way less with the fallout in the economy.

Data released on Monday show total deposits at the end of June in financial institutions totalled $123 billion.

That was 21% below the $157 billion in deposits being held by banks, on behalf of customers, at the end of June 2009.