Nonperforming Loans for Domestic Bank Up by 7%

Kareem Michael

During today’s budget presentation, Prime Minister John Briceño said that nonperforming loans for domestic banks are at seven percent higher than the max of five percent. This, he said, is due to the pandemic and excessive risk-taking by the financial institutions. During the press conference with the Central Bank of Belize, Governor Kareem Michael spoke on the reality, saying that the increase was predicted.

Kareem Michael, Governor, Central Bank of Belize

“There is an increase in nonperforming loans within the banking system and naturally one would have expected that given the sharp contraction that the country experienced in the midst of COVID. And the Central Bank along with the Bankers’ Associations and also the Credit Union League taking steps to what we had predicted would have been a high level of nonperforming loans. While we have done quite a bit to contain that level of fallout by a well-crafted exit strategy, there still was some damage, if you will, because businesses did disappear and some businesses were not able to recover out of the pandemic. That’s unfortunate, but nothing that should suggest that the Central Bank does not have the capacity to deal with any increase in risk which may result from this increase in nonperforming loans. So it is one which we are on top of and one which we continue to monitor closely.”