Banks are beginning to look for solutions beyond six-month moratoriums they offered customers during the Covid-19 pandemic. (File photo: CLAIRE SHEFCHIK)

Last week, Republic Bank Managing Director Michelle Palmer-Keizer spoke to one of her customers, a small-business owner who had received a six-month moratorium on her bank loan.

“She said, ‘I’m so happy for the loan moratorium. I’ve been using those funds to refurbish my little apartments for Airbnb, so that when the borders reopen my product will be better than ever,’” she said. “And I thought, ‘You know, what a very, very good story, because that was really what we intended.’”

However, the three- to six-month moratoriums Virgin Islands banks offered their loan customers in March will soon lapse, and with no clear end to the Covid-19 crisis in sight, Premier Andrew Fahie told the House of Assembly on Friday that he has asked banks to consider extending the measures.

“In light of the deepening economic downturn from Covid-19 and based on the forecasts that the impacts would be protracted due to absence of a vaccine or cure for the coronavirus, [I urged the banks] to consider extending the moratorium to one year,” he said.

One bank has already agreed, he added: The National Bank of the Virgin Islands confirmed its moratorium would last until March 31, 2021.

Other banks, however, whether or not they extend the moratoriums, are looking toward other more long-term forms of relief they may be able to offer customers, according to the premier.

First Caribbean International Bank “gave a break to statutory agencies that have loans with them like BVI Ports Authority,” Mr. Fahie explained.

This measure, he said, would grant the agencies “not only assurance, but an opportunity … to reorganise themselves and strategise for remaining resilient.”

The premier explained that he knows the banks “want to help the people more than they already are doing.”

He added, “I know that they are aware that if their customers go bankrupt then they will have no customers left to do business with.”

Bank options

Ms. Palmer-Keizer said during a webinar last week sponsored by New Energy Events that now is the time for banks to consider more holistic options to help customers weather financial hardship.

“We know this economic slowdown is going to be for an extended period,” she said. “And many of our customers’ income streams remain at zero. It’s not about kicking the can down the road. It’s not about helping our
customers pay their loans, because, you know, we will get to
the can sometime.”

She did not say whether the bank plans to extend its moratorium past the six-month mark.

Republic Bank, a 150-year-old institution based in Trinidad
and Tobago, recently completed its purchase of the former Scotiabank branch in the VI, and began operations at its new Road Town location last month.

Ms. Palmer-Keizer said her team is discussing options like reducing interest rate concessions and loan tenors. Personal customers who have become
unemployed, either temporarily or permanently, may be offered restructuring and consolidation options and other concessions.

However, whatever measures may be introduced, the bank
to focus on encouraging customers to “look towards sustainability” and ask some hard questions about their businesses.

“Are you really using cash that you may have to your best advantage?” she asked.

Support plan

She also suggested putting any cash flow toward working capital and product improvement, or paying down existing

Republic’s “post-Covid support plan” is designed to help customers in these areas, she added.

“We are going to be sharing practical examples with our customers using online portals. They can get help with increasing revenue and finding new revenue streams and new markets,” she said.

For its part, she added, the bank will provide guidance in technical solutions, such as techniques for adopting digital and e-commerce.

“Now’s the time to start those conversations with your bank,” she said, adding that Republic will be offering these programmes before the moratorium runs out.

She added that the focus will not be only on reducing delinquency but on providing holistic support for customers.

“Of course we will look at vulnerable sectors,” she said, explaining that in the wider Caribbean this largely refers to tourism and the oil sector. “It’s us being proactive and reaching out to those sectors and getting them moving and working with them much more quickly.”