Dear Editor,
After careful review of the recently released Financial Stability Report 2015 published by the Bank of Jamaica, I found it rather alarming that household debt was growing at an exponential rate. Almost contradictory, in the face of less purchasing power of our consumers, people are borrowing more from banks to meet the shortfall in their lifestyles. The ennui of the fallacy for belonging, which is heightened by the fact that we are borrowing money to buy luxury items, cars, furniture and pay off other personal loans.
Household debt is defined as the amount of money that all adults in the household owe financial institutions. It includes consumer debt and mortgage loans. According to the Bank of Jamaica report, real consumer loans grew at a faster pace 5.8 per cent for 2015 as opposed to just one per cent for 2014.
I am concerned about these figures because recent studies by the International Monetary Fund found that household debt has a direct correlation with the level of protracted negative effect on a countries economy.
If our people are spending $7 of every $10 of household disposable income on servicing debt, not only will this negatively affect the ability to invest in real personal growth and investment in residential homes, but this growing consumer debt of approximately $200 billion is unsustainable and may lead to spiralling foreclosures and repossessions. This will only result in the contraction of the economy and lost ability of households to service their already amplified debt.
The first step for me is introspection and sensitisation. I call up on the Jamaica Information Service and the relevant communication channels to increase the number of money management programmes that can help to inform our people of the import of proper money management and living within ones means as a household, which will only result in improving our nation.
Richard Longmore
General Manager
Jamaica Racing Commission
rlongmore@jrc.gov.jm
After careful review of the recently released Financial Stability Report 2015 published by the Bank of Jamaica, I found it rather alarming that household debt was growing at an exponential rate. Almost contradictory, in the face of less purchasing power of our consumers, people are borrowing more from banks to meet the shortfall in their lifestyles. The ennui of the fallacy for belonging, which is heightened by the fact that we are borrowing money to buy luxury items, cars, furniture and pay off other personal loans.
Household debt is defined as the amount of money that all adults in the household owe financial institutions. It includes consumer debt and mortgage loans. According to the Bank of Jamaica report, real consumer loans grew at a faster pace 5.8 per cent for 2015 as opposed to just one per cent for 2014.
I am concerned about these figures because recent studies by the International Monetary Fund found that household debt has a direct correlation with the level of protracted negative effect on a countries economy.
If our people are spending $7 of every $10 of household disposable income on servicing debt, not only will this negatively affect the ability to invest in real personal growth and investment in residential homes, but this growing consumer debt of approximately $200 billion is unsustainable and may lead to spiralling foreclosures and repossessions. This will only result in the contraction of the economy and lost ability of households to service their already amplified debt.
The first step for me is introspection and sensitisation. I call up on the Jamaica Information Service and the relevant communication channels to increase the number of money management programmes that can help to inform our people of the import of proper money management and living within ones means as a household, which will only result in improving our nation.
Richard Longmore
General Manager
Jamaica Racing Commission
rlongmore@jrc.gov.jm