On Wednesday evening, August 5th, a large crowd converged at the spacious “Loft” of Davida’s Restaurant, in Crocus Bay, to witness the National Commercial Bank of Anguilla’s special launch: its plan for a 100% loan financing in home construction or home purchase.
This loan facility, dubbed “Come Home with NCBA”, is good news particularly for young people who wish to advance towards their goal of owning their own homes in these critical times of economic hardship. In providing an ease towards achieving this goal, NCBA offers working youngsters — and others who qualify — an impressive 30-year loan package for up to EC$1 million with an interest rate of 5%.
Ms Sharmaine Francois, CEO
Prayer for the evening’s event was said by NCBA’s Credit and Business Development Officer, Mrs. Vanda Brown. The proceedings were moderated by NCBA’s Chief Executive Officer, Ms. Sharmaine Francois. She recognized the presence of the Parliamentary Secretary of Economic Development, the Honourable Mrs. Quincia Gumbs-Marie, before calling on the Chairman of the Board, Mr. Carl Harrigan, to address the gathering. He began:
“It gives me great pleasure to make some brief remarks on behalf of the directors and staff of the National Commercial Bank of Anguilla, on the occasion of the launch of this ‘Come Home’ mortgage package. If one can remove the COVID-19 pandemic, Hurricane Irma, unemployment, and the misfortunes of this world, then we could dream big for this once-in-a-lifetime opportunity.
“When I approached the bank for a mortgage, about twenty-seven years ago, I was offered an interest rate of eleven percent. I was encouraged to have a slab in place to ensure that the land had sufficient value to be used as collateral for the project. This, in itself, meant that I had to incur upfront costs. So, in essence, it was not 100% financing as we offer here today.”
Mr. Harrigan continued by pointing to another cost that he was required to incur back then: “The legal fees were one percent of the loan value,” he said, “so one percent of the total loan amount had to be paid to a lawyer. Fast forward to today…and you would immediately realise that now is the time to seek to build or purchase a home in Anguilla. Today, we present you all the facilities to have your own home with 100% financing. This should be a significant investment.”
He went on to compare the advantages of owning one’s home against renting: “Owning where you live is very different from renting where you live,” he said. “Of course, there may be a few circumstances where renting is the best option. But it is always better to own a home than to rent. The advantages are numerous and I will list a few: it helps to build equity; it provides a tax advantage where taxes are applicable; it gives you freedom to modify and make changes to the structure; there is the chance to choose a favourable location; it improves stability; it is cheaper than renting, and after fully paying your loan you ultimately own the property.”
He continued: “Because mortgage payments are uniform, it assists the borrower with better financial management. There is a sense of pride in having your own home. NCBA, today, provides Anguillians — at home and in the diaspora — with this great financing opportunity. You can start with a land purchase, or buying a home, or building your own home. It is your choice. I encourage you, as potential home owners, to carefully consider NCBA’s offering today. Make a wise choice, and own a ‘piece of the rock’.”
With regard to such an unusual loan offering, NCBA’s CEO, Ms. Francois, set out to explain “why now”, considering the current unfavourable state of the economy, on one hand — and the favourable liquid position of the bank, on the other hand, which enables it to offer a 100% fully financed mortgage loan. She stated: “When we look at the COVID-19 pandemic that significantly affects us today, obviously it continues to impact our economy on an individual level, as well as from a business perspective.
“As of March 30th, what we have seen happen in Anguilla is that 95% of our restaurants, and virtually 100% of our hotels, have closed their operations. These closures have directly affected our customers, the major portion of whom are sustained by the tourism industry. Besides, our borders are also closed, and this contributes to driving negative economic activity.
“The customer segments that we assessed as being most vulnerable at this time consist of persons who work in hotels, restaurants, dealers, car rentals, and real estate, etc. As a result of the current pandemic, a large percentage of our customers have lost income, and we have also seen the cash flow of businesses being affected, resulting from the economic downturn. Due to this, we have had to commence a moratorium programme in order to give some relief to many of our customers who already have NCBA loans.”
Ms. Francois then reported the economic performance of Anguilla relative to the usual benchmark for its annual economic growth: “We have figures which reflect the 2020 projections for economic growth due to COVID-19. According to figures from our ECCB website, ‘the Eastern Caribbean Currency Union (ECCU) is expected to contract by as much as 15%, as an entire group.’
“In the case of Anguilla, in particular, we will see a projected negative growth of -25%. This is a notable contraction in economic performance because, even after Hurricane Irma, Anguilla was affected with a negative growth performance of just -6%. So a 25% decline in 2020 is quite significant. Ideally, a country should achieve a benchmark of at least a positive 5% in annual economic growth.”
Then, quickly referring to the bank and its positive outlook, Ms. Francois claimed: “We are well positioned to drive that economic growth. We cannot play dead. I wish to raise the point that NCBA is liquid. We have liquidity ratios that are well above regulatory benchmarks. So we have a lot of money that is not working for us. We hold 63% of the market share in total banking deposits, an equivalent of EC$1.2 billion. Hence, we need to put this money to good use.”
She said that on account of these reserves, NCBA now provides an enabling environment to those that are employed so that they can invest at this time by using affordable packages. And with this 100% financing, she said that the bank wants to ensure that it is easier to obtain a loan for home ownership without any extra costs.
To be specific, Ms. Francois noted that the target market for this loan package is Anguillians and residents of Anguilla, as well as Anguillians in the diaspora — the Caribbean, the UK, the US and across the globe. She stated that Anguillians living abroad hold deposit accounts of EC$88.2 million in Anguilla. It is worthy to note, however, that those from the diaspora who apply for this particular loan would receive financing of up to 80% of the entire amount, and not the full 100% as is afforded to those who are residing in Anguilla.
On hand at the launch were affiliate key stakeholders in home construction and real estate. These included officials from the Inland Revenue Services, the Lands and Survey Department as well as the Physical Planning Department. Also present were: Cleveland Richard – Real Estate; Vanburn Brooks – Architecture; Contractor, Euroy Richardson; and Insurance Agent, Joan Hodge.
Each of the above stakeholders delivered presentations providing useful information, and advice, to assist those who would be interested in obtaining the 100% financing mortgage package. More information may be obtained by contacting Mrs. Cassila Bernier-Hull, NCBA’s Credit Manager, at 1-264-497-2101.
- Staff Reporter, James R. Harrigan
