With Christ­mas in full swing it seems some peo­ple are spar­ing no ex­pense this year as banks and cred­it unions are re­port­ing high de­mand for loans.

Both Sco­tia­bank and Re­pub­lic told the Busi­ness Guardian they saw sig­nif­i­cant in­ter­est in both com­mer­cial and con­sumer bor­row­ings.

In an emailed re­sponse Sco­tia­bank ex­plained its da­ta showed the vol­umes re­main con­stant when com­pared to Christ­mas 2021.

How­ev­er, it not­ed “the vol­umes af­ter COVID-19 have been quite pos­i­tive,” adding that its team con­tin­ues to “con­sis­tent­ly ful­fil cus­tomer re­quests for all types of loans.”

In shar­ing some in­sights as to some of the loan re­quests, Sco­tia­bank said these in­clude re­al es­tate ac­qui­si­tion, home im­prove­ment and au­to pur­chas­es.

Sco­tia­bank has al­so been try­ing to woo some cus­tomers through unique of­fer­ings.

“We en­cour­age cus­tomers to make their move with us this Christ­mas. Whether they need ad­vice on cus­tomised bor­row­ing so­lu­tions for a new or used ve­hi­cle, home ren­o­va­tion or large pur­chas­es; we lis­ten, so every plan is tai­lored to their unique needs.”

Oth­ers in­cen­tives in­clude Sco­tia Plan Loan (SPL) to re­fi­nance an ex­ist­ing one, or ap­ply­ing for a new cred­it card with a chance to win over $350,000.

And for new loans and re­fi­nances, Sco­tia’s prizes in­clude a cruise for two on the Vir­gin Voy­ages Scar­let La­dy which comes with re­turn flights for two and spend­ing mon­ey.

There’s al­so a chance to win a trip for two to Los An­ge­les which comes with re­turn flights for two, ho­tel and spend­ing mon­ey as well as win­ning a trip for two to Mi­a­mi al­so with re­turn flights for two, ho­tel and spend­ing mon­ey.

Car loans are al­so pop­u­lar for the Yule­tide sea­son as Sco­tia has ex­tend­ed terms on au­to loans with up to $4,000 cash back.

Re­pub­lic Bank al­so said it too has seen an in­crease in its loan port­fo­lio.

“Gen­er­al­ly, we have found that con­sumer con­fi­dence has in­creased emerg­ing from the COVID-19 pan­dem­ic and as a re­sult Re­pub­lic has been wit­ness­ing a pos­i­tive re­sponse to its Christ­mas loan cam­paign,” it ex­plained.

Among the most pop­u­lar bor­row­ings sought by Re­pub­lic’s cus­tomers in­clude re­fi­nance, debt con­sol­i­da­tion and home im­prove­ment loans.

In Oc­to­ber Re­pub­lic Bank launched its “Now This is Christ­mas,” loan sale.

The event held at the Cen­tre of Ex­cel­lence, Ma­coya in­clud­ed deals, in­cen­tives and spe­cial of­fers on new, hy­brid, elec­tric and roll-on roll-off ve­hi­cles.

Ve­hi­cles were on dis­play from new car deal­er­ships in­clud­ing Lifestyle Mo­tors, ANSA Mo­tors, Massy Mo­tors, South­ern Sales and Ser­vice and La Fast Mo­tors.

Re­pub­lic Bank said it has dif­fer­en­ti­at­ed its of­fer­ings to its cus­tomers by pro­vid­ing re­duced rates for its en­tire Christ­mas loan cam­paign.

“In fact, rates were even low­er in Oc­to­ber as part of an ear­ly bird spe­cial to our cus­tomers. RBL al­so host­ed a ‘Pick Your Present’ pro­mo­tion in No­vem­ber where suc­cess­ful ap­pli­cants were giv­en the op­por­tu­ni­ty to pick from a range of ad­di­tion­al re­wards in­clud­ing dis­counts on loan ne­go­ti­a­tion fees, brand­ed pro­mo­tion­al items and elec­tron­ics,” it added.

On­go­ing is Re­pub­lic’s “De­cem­ber to Re­mem­ber” pro­mo­tion where cus­tomers can fur­ther win cash prizes in ad­di­tion to ac­cess­ing com­pet­i­tive loan of­fer­ings.

The Busi­ness Guardian al­so reached out to First Cit­i­zens which on­ly said: “The bank is still in the midst of the Christ­mas loan pe­ri­od and as al­ways, we are work­ing to meet the needs of our cus­tomers through both in­no­v­a­tive prod­uct of­fers and cus­tomised so­lu­tions.”

In its lat­est Mon­e­tary Pol­i­cy Re­port is­sued on Mon­day, the Cen­tral Bank not­ed that af­ter 19 months of de­cline, con­sumer lend­ing re­bound­ed in May 2022.

It added that con­sumer loans record­ed 4.2 per cent growth (year-on-year) in Sep­tem­ber 2022, up from a 3.2 per cent con­trac­tion in Sep­tem­ber 2021.

Cred­it union loans al­so in­crease

Ac­cord­ing to Di­ane Joseph, chief op­er­at­ing of­fi­cer, Co-op­er­a­tive Cred­it Union League of T&T, many cred­it unions al­so had a high in­crease in loans.

How­ev­er, she not­ed oth­ers re­main at the same lev­el as 2021 while a few­er cred­it unions see­ing a de­cline in loans.

But bor­row­ings con­tin­ue to be healthy as Joseph said many cred­it unions al­ready sur­passed their loan tar­gets for 2022.

Ad­di­tion­al­ly, there’s a good mix of the loan type.

“Christ­mas loans along with debt con­sol­i­da­tion and home ren­o­va­tion re­main the top three loans in de­mand at this time. The feed­back is mem­bers have tak­en the op­por­tu­ni­ty to cap­i­talise on the re­moval of the COVID-19 re­stric­tions to pur­sue home im­prove­ment, some con­sol­i­dat­ing to im­prove their take home pay while oth­ers are seek­ing to en­joy this Christ­mas af­ter two years.

“There has been less than 10 per cent in re­quests for com­mer­cial loans so this area has shown no trac­tion,” Joseph ex­plained.

She al­so not­ed that over 50 per cent of cred­it unions now of­fer spe­cial Christ­mas loans at very com­pet­i­tive rates such as .4 per cent, 0.5 per cent to 0.75 per cent per month on the de­clin­ing bal­ance.

“This is very com­pet­i­tive as the nor­mal lend­ing rate is one per cent per month on the de­clin­ing bal­ance which av­er­ages ap­prox­i­mate­ly 6.6 per cent per an­num,” Joseph added.

Al­so, she said many cred­it unions are of­fer­ing in­vest­ment loans where mem­bers can ac­quire a loan for sav­ings and oth­er ex­pens­es thus “cre­at­ing wealth for the mem­ber.”

Cred­it unions are al­so pro­vid­ing loans to mem­bers ad­verse­ly af­fect­ed by the re­cent flood­ing, par­tic­u­lar­ly in the south­ern ar­eas, Joseph said.

“Thus, it makes the process less bur­den­some and eas­i­er to get mem­bers back on their feet again.

“This is the so­cial side of our work and cred­it unions have once again quick­ly amend­ed its poli­cies to pro­vide the low­est pos­si­ble rate of in­ter­est for this group,” she added.

The down­side of bor­row­ing how­ev­er, is it is di­rect­ly linked to the high lev­el of un­cer­tain­ty in the job mar­ket, un­em­ploy­ment, un­der­em­ploy­ment and even re­trench­ment, Joseph not­ed.

Ad­di­tion­al­ly, she said “a small­er num­ber of mem­bers” cleared loans from shares to take home suf­fi­cient funds to care for their fam­i­lies.

“This is in large part, due to re­trench­ment in a num­ber of com­pa­nies in the oil in­dus­try, the telecom­mu­ni­ca­tions in­dus­try and oth­er busi­ness­es that were down-sized or closed be­cause of the ef­fects of the COVID-19 pan­dem­ic,” Joseph ex­plained.

She said the league con­tin­ues to mon­i­tor the cred­it union sec­tor to keep abreast of new and emerg­ing trends in busi­ness con­duct­ed by mem­bers, for ex­am­ple in­creas­es in loan re­quests for debt con­sol­i­da­tion and per­son­al loans.

How­ev­er, Joseph is ad­vis­ing that giv­en the cur­rent en­vi­ron­ment a “struc­tured ap­proach” is re­quired as she sug­gest­ed that fam­i­lies re­quire guid­ance on their best fi­nan­cial so­lu­tion to en­able them to sur­vive in “an econ­o­my as hard as this one.”

“As such, our rec­om­men­da­tion is to have fam­i­ly meet­ings, plan, pool fi­nan­cial re­sources as far as is prac­ti­cal and run the home with a high lev­el of fi­nan­cial pru­dence. If we fail to do this, there may be a high­er lev­el of so­cial fall­out,” Joseph added.