Christ­mas is a sea­son for spend­ing. Whether on ad­di­tion­al gro­ceries or fan­cy gifts, the Yule­tide hol­i­day is of­ten awash with bustling shop­pers.

Hav­ing the fi­nan­cial means to en­joy that mem­o­rable day is easy for some as mon­ey is no is­sue, while oth­ers plan and con­duct their shop­ping months in ad­vance with as­tute bud­get­ing.

For many oth­ers buy­ing presents, ham and all the fan­cy trim­mings mean tak­ing a loan--an oc­ca­sion that fi­nan­cial in­sti­tu­tions wel­come with open arms.

The Busi­ness Guardian reached out to some of these en­ti­ties in­clud­ing banks, the cred­it union fra­ter­ni­ty and lend­ing agen­cies such as Uni­com­er.

The gen­er­al con­sen­sus was thus far, there has been an uptick in cus­tomers seek­ing loans specif­i­cal­ly for the sea­son.

Some of the ques­tions asked were has there an in­crease in peo­ple ap­ply­ing for Christ­mas loans this year com­pared to last year; has there been an in­crease in new cus­tomers ap­ply­ing for loans? If so, can you give an es­ti­mat­ed per­cent­age of new cus­tomers and what is the gen­er­al pur­pose of these loans.

Re­pub­lic Bank Ltd not­ed that the Christ­mas sea­son “con­tin­ues to be an im­por­tant one for our pop­u­la­tion and the bank has seen steady loan growth since the launch of our ‘Make Your Christ­mas Mag­i­cal’ cam­paign in Oc­to­ber.”

RBC how­ev­er, not­ed that it was un­able to dis­close de­tailed in­for­ma­tion around its loan busi­ness.

The bank shared de­tails of its loan of­fer­ings stat­ing, “We launched a Christ­mas Loan Cam­paign that of­fers our per­son­al clients loan so­lu­tions with choice, flex­i­bil­i­ty, and struc­tured pay­ments. A spe­cial com­po­nent of the cam­paign is the full waiv­er of bank man­age­ment fees on all per­son­al loans, in­clud­ing mort­gages, au­to fi­nanc­ing, and con­sumer, with com­pet­i­tive in­ter­est rates and terms.

“Fur­ther­more, we are of­fer­ing a chance to win up to $30,000. We have re­ceived a favourable re­sponse to the cam­paign, with a keen in­ter­est in con­sumer loans, for home im­prove­ment, per­son­al ex­pens­es, and debt con­sol­i­da­tion.”

Mean­while, Uni­com­er un­der which Courts fall, said de­spite a slow start, it ex­pects a good sea­son re­gard­ing its loan port­fo­lio as Christ­mas draws clos­er.

“At this time, there isn’t any no­table change in the cred­it ser­vices of­fered by Uni­com­er (Trinidad) Ltd. How­ev­er, we do an­tic­i­pate that these ser­vices will in­crease over the fes­tive sea­son. We have seen an up­take in our ex­tend­ed war­ran­ty ser­vices that pro­vide cov­er­age for the prod­ucts pur­chased at our stores.

“We have al­so seen the same in­ter­est with our ex­ter­nal ex­tend­ed war­ran­ty that cov­ers large ap­pli­ances that may have been pur­chased on­line or from an­oth­er lo­cal re­tail­er,” the com­pa­ny said.

Re­gard­ing the na­ture of the loans, Uni­com­er not­ed that in align­ment with the Mon­ey Lenders Act it is lim­it­ed in re­spect of “what we can dis­close to the me­dia, as the same, in most in­stances, can be seen as so­lic­it­ing or ad­ver­tis­ing be­yond the scope that the act al­lows.”

On the gen­er­al age de­mo­graph­ic of those seek­ing loans, it said any­one over the age of 18 years of age can ap­ply for these ser­vices.

In­crease in cred­it union loans

Mean­while, cred­it unions have al­so seen an in­crease in their Christ­mas loan ap­pli­ca­tions.

In fact, chief op­er­at­ing of­fi­cer of the Co­op­er­a­tive Cred­it Union League of T&T, Di­anne Joseph, said, “It has been a very pleas­ing in­crease in Christ­mas loans at sev­er­al cred­it unions and in­deed it has al­ready sur­passed those of 2022 and 2021.”

Joseph al­so not­ed there has been an uptick in new cus­tomers ap­ply­ing for loans.

“In many in­stances, there has been an in­crease in new mem­bers seek­ing to ob­tain loans. In fact, many cred­it unions have al­ready sur­passed their bud­get for the 2023 pe­ri­od and are ac­tive­ly plan­ning for 2024. New mem­bers are on a growth path as more than 20 to 25 per cent of cred­it unions now en­joy growth of over three to five per cent in new mem­bers,” Joseph stat­ed.

Apart from Christ­mas, she not­ed that scores of mem­bers have al­so been seek­ing to ob­tain loans for ve­hi­cles, home im­prove­ment, ed­u­ca­tion, va­ca­tion, debt con­sol­i­da­tion, fur­ni­ture and ap­pli­ances and busi­ness.

Ac­cord­ing to Joseph, mo­tor ve­hi­cles rep­re­sent­ed over 40 per cent and 60 per cent was shared among the oth­er ar­eas.

“Va­ca­tion loans have al­so in­creased as we be­lieved that many mem­bers are now more com­fort­able that the COVID-19 risk has been low­ered and they are now tak­ing the op­por­tu­ni­ty to vis­it fam­i­ly and friends or just per­son­al va­ca­tions out­side of the ju­ris­dic­tion,” Joseph said.

She not­ed this was a clear in­di­ca­tion that busi­ness is back to a high lev­el of nor­mal­cy.

“The sta­tis­tics have shown that mem­bers are again com­fort­able for shop­ping for Christ­mas trees, dec­o­ra­tions and oth­er fun items. While this is not ex­ces­sive, our ob­ser­va­tion is that fam­i­lies are hap­py to re­turn to this lev­el of nor­mal­cy and have been tak­ing ad­van­tage of it through our loans.

“We note, how­ev­er, that their loan ap­pli­ca­tions have not been ex­ces­sive as there is a bet­ter sense of spend­ing with cau­tion. The ev­i­dence is found in the fact that mem­bers con­tin­ue to in­crease sav­ings while tak­ing af­ford­able loans. This is in­deed good plan­ning and we mo­ti­vate oth­er mem­bers to do the same,” Joseph added.

What makes cred­it unions loans so at­trac­tive?

Joseph said there are min­i­mal or no fees, shares re­main in­tact and at­tract div­i­dends while the loan is be­ing re­paid.

Added to this, she said pay­ment on the de­clin­ing bal­ance al­lows for flex­i­bil­i­ty and af­ford­abil­i­ty.

“Our cred­it unions un­der­stand the high lev­el of liq­uid­i­ty with­in the sys­tem and have been work­ing with mem­bers to re­alise their dream in many of the ar­eas above iden­ti­fied by the re­duc­tion in rates to 0.50 per cent or 0.66 per cent de­pend­ing of the type of loan.

“The av­er­age young pro­fes­sion­al needs a ve­hi­cle to take them from one place to an­oth­er and in ad­di­tion, giv­en the high crime rate, many per­sons are mak­ing a sac­ri­fice to own their own ve­hi­cle to fa­cil­i­tate what is con­sid­ered a safer method of trans­porta­tion. As such, we con­tin­ue to re­view the so­cial re­quire­ments of our mem­bers and work with them. This is in line with our co-op­er­a­tive prin­ci­ples of Con­cern for Com­mu­ni­ty, Peo­ple Help­ing Peo­ple and Au­ton­o­my and In­de­pen­dence,” Joseph added.

She al­so shared some key ad­vice re­gard­ing fi­nanc­ing.

Ac­cord­ing to Joseph, fam­i­lies must start or con­tin­ue to en­gage in di­a­logue in the home to ar­rive at what may be con­sid­ered pru­dent for their per­son­al lives and to struc­ture their ex­pen­di­ture in line with a well-struc­tured, but sim­ple, bud­get which must take in­to ac­count their take-home pay.

Al­so, Joseph said par­ents are ad­vised to guide the chil­dren so that they un­der­stand not on­ly val­ue for mon­ey, but the cost of mon­ey, long term ef­fect and thrift.

The Co­op­er­a­tive Cred­it Union League of T&T as the Na­tion­al Um­brel­la Or­gan­i­sa­tion for 129 cred­it unions, has a mem­ber­ship of 700,000 mem­bers and as­sets of $19 bil­lion.