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…to call on govt to launch probe into matter
By Svetlana Marshall
Guyanese Businessman Terrence Campbell said it is becoming increasingly evident that commercial banks in Guyana are discriminating against Afro-Guyanese, forcing them to pay interest rates significantly higher when compared to other ethnicities.
“…one bank granted a G$2B loan at 8% with movable assets as collateral whilst requiring that I pay 11% with immovable assets as security. Today, incidentally, a second bank revealed loans to businessmen, over whom there have been public questions, with interest rates of 9.5% and 10% whilst requiring that I pay 13%,” Campbell said as he painted a vivid picture of the situation in a recent post on popular social media platform Facebook.
In an interview with Village Voice News, Campbell, who is the Chief Executive Officer of Camex Restaurants Incorporated and an Entrepreneur for more than 30 years, said while there was always a suspicion that there was a disparity in the requirements set for Afro-Guyanese when compared to those set for Guyanese of other ethnicities in the provision of credit, recent documents emerging from the banking sector have confirmed this suspicion.
“In recent times, I was able to accidentally see documents relating to the credit that has been granted to businessmen, who were obtaining loans from the same banks that I needed to obtain loans from, and their security was less, the security that they offered was less, and their interest rate was less as well,” Campbell told Village Voice News.
He is now convinced that banks in Guyana are applying what he described as the “black surcharge” to Afro Guyanese seeking to access finance, thereby placing them at a greater disadvantage in their quest to establish and or develop their businesses. A surcharge, according to Investopedia, is an extra fee, charge or tax that is added on the cost of a good or service beyond the initial quoted price.
While the cases cited are based on his experience, Campbell said other Afro-Guyanese businessmen and women have expressed similar concerns, while noting that the situation may also be the same for minority groups including Amerindian Guyanese, women and persons with disabilities among others.
Noting that he has never defaulted on his loan, Campbell said the banks must answer why businessmen with questionable characters and lower credit scores are being granted loan facilities at lower interest rates, and lower security requirements. For Campbell, the issue is clearly linked to that of race.
The businessman, who also operates Federal Express in Guyana and Suriname and Consolidated Cargo and Aviation Services and has interest in APEX Insurance Brokers, signaled his intention to write Dr. Ashni Singh, the Senior Minister with responsibilities for Finance under the Office of the President, on the matter.
In the letter, which will also be copied to President Irfaan Ali and the Governor of the Bank of Guyana, Dr Gobind Ganga, Campbell is expected to request that an investigation be launched into the Banking Sector to determine the gravity of the situation.
“We need to examine the rejections and to see whether there is a difference in the rate of rejection across ethnicities in Guyana. And we need to examine what is the weighted average interest rate cost for the different ethnicities in Guyana,” Campbell said. He also said special attention should also be placed on the challenges faced by minority groups in accessing credit for the development of Small and medium-sized enterprises (SMEs).
Importantly, Campbell intends to make a strong case for the passage and implementation of an Equal Credit Opportunity Act to guard against discrimination in the banking sector. Such a legislation is enforced in the United States of America (USA) by the Federal Trade Commission, while an Equality Act (2010) exists in the United Kingdom.
The legislation, if adopted by Guyana, would prohibit credit discrimination on the basis of race, color, religion, national origin, sex, marital status, and or age.
“It is necessary for us to have such legislation. The Central Bank is required to examine the lending practices and in terms of the financial soundness of banks, [however], their remit does not include looking for discrimination, and I think the only way they would add that, is if we have a legislation,” Campbell contended. He reminded that while banks are privately owned they have a public responsibility not discriminate.
In reiterating the need to end discrimination in the Banking Sector, Campbell explained that the challenges Afro-Guyanese face in becoming entrepreneurs are not new.
“Afro Guyanese have been experiencing challenges in engaging in entrepreneurship for 170 years. Immediately after emancipation we were allowed, in our first acts of entrepreneurship to buy land. In general, we bought those lands in large groups, and once it was recognized that we were buying lands in large groups, regulations were changed, and the size of the groups was reduced,” Campbell explained.
He said the restrictions and higher requirements forced Afro Guyana to take up wage employment. “And the history of Afro Guyanese, we became policemen, we became firemen, we became teachers, we became civil servants generally, and to a lesser extent carpenters; there was some entrepreneurship but nothing serious, no big business. We were not able to advance like the Chinese and Portuguese [and] that continued even pass independence,” Campbell said.