SBAJ outraged over commercial banks’ refusal to align lending rates with BOJ reduction
KINGSTON, Jamaica— The Small Business Association of Jamaica (SBAJ) has expressed outrage over commercial banks refusal to adjust their lending rates in accordance with the Bank of Jamaica’s (BOJ) reduced policy interest rate.
In a press release on Monday, the SBAJ said the BOJ reduced its policy interest rate for the fourth consecutive time this year bringing it down to six per cent per annum, effective December 23, 2024. It added that this series of cuts forms part of the central bank’s strategy to stimulate economic growth and reduce borrowing costs for consumers.
However, commercial banks have not adjusted their lending rates accordingly, leaving borrowers struggling under high-interest auto loans, mortgages, credit cards, and personal loans, SBAJ said.
It went on to accuse banks of prioritising profits over public interest and undermining the BOJ’s monetary policy, and has called for immediate action to address the financial strain on its members.
“This is a slap in the face to small business owners who are already hanging by a thread,” said Garnett Reid, president of the SBAJ.
“The BOJ is doing its part to create an environment for growth, but the banks are acting as gatekeepers, preventing these benefits from reaching the people who need them most,” Reid added.
Michael Lecky, immediate past president of the SBAJ, echoed similar sentiments.
“We have members who are still paying exorbitant interest rates of 15-18 per cent on loans, while the BOJ has lowered rates significantly. This disparity is not just unethical; it’s economic sabotage. The banks are profiting at the expense of the backbone of our economy—small businesses,” he argued.
The SBAJ went on to accuse the Bank Association of Jamaica (BAJ) of remaining silent amid the outrage, while it called for transparency and alignment with the BOJ’s monetary policy.
It further called for government intervention to ensure that the banks comply with the BOJ’s policy changes.
“The longer this goes unchecked, the more damage will be done to our small business community and the economy at large. We need immediate action to hold these financial institutions accountable,” Reid stressed.
