Almost a third of active loans with the Cayman Islands Development Bank were past due as of the end of the 2013-2014 fiscal year, according to financial statements tabled at the Legislative Assembly this week. Additionally, during the year, the bank repossessed more than $6.6 million in collateral from borrowers and wrote off another $4.8 million in loans.
The audit comes out amid debate over the bank, which, thanks to government stepping in, was able to refinance more than US$37 million in debt and announced plans to restart its loan program for small– and mid-sized business and for civil service members.
“These programs have been structured in such a way as to maximize the assistance we can give, while not imperiling the bank’s financial stability through bad decision making, as had been the case under the previous administration,” Financial Services Minister Wayne Panton said recently.
But if previous performance on the government-backed bank’s loans is any indication, some borrowers may have trouble paying back the money.
As of June 30, 2014, more than $3.1 million of mortgages were past due, along with $2.3 million in business loans and other loans, for a total of more than $9.2 million in past-due loans from a total $31.6 million out in loans at the time.
The new loan program will give $100,000 to small business owners, and civil servants can borrow up to $20,000.
Under the previous program, at the end of the 2013-2014 year, more than $2.3 million in business loans were past due, with about $600,000 of that two to three months late.