The Christmas festivities are now over and the new year and reality beckon. For those who have allowed their lives to be driven by doubt and pessimism, or who are too easily influenced by the doom and gloom preachers, life will not be any different than it has been in 2015. There will be nothing to look forward to in terms of a better prospect for their lives. Those who have been dependent on politicians to give them something or to effect some change in their personal circumstances will continue to be disappointed. There will be no cloud with a silver lining; life will continue to be hard, depressed and brutish.

But there are those who will subscribe to the philosophy that it is hope that springs eternal in the human breast. As practitioners of hard pragmatism, they realise that what they make of life is largely their own responsibility. If they have been productive they will continue to be so, despite the hurdles that are cast in their way. They have learnt to live with the depredations of politicians and have mastered the art of survival despite them. They will not join with the chorus of naysayers and sing with the choir “nutten nah gwaan” as they realise that if anything is to go on they themselves have to be part of the catalyst for change. It is those who think like this and act out of their own enlightened self-interest — while not neglecting the needs of others — that will effect the greatest change in Jamaica for the good.

I want to believe that there are more of these people in Jamaica than those mentioned in the introductory paragraph. But one gets the gnawing feeling that this might not be so; that what one considers to be enlightened self-interest is no more than a greedy pursuit of wealth and power on the part of wealthy elites in variance with the interests of the large majority of people in this country.

The banks come readily to mind. The International Monetary Fund (IMF) has now admitted what has been a long-standing obstacle to economic growth in Jamaica: that the spread between the rates that the banks pay on deposits and what they charge on loans is too wide to foster meaningful economic growth.

A recent sector analysis of Jamaica’s economic support programme done by the Fund revealed that the Jamaican financial system lags behind its more efficient Caribbean counterparts. The Fund notes: “Jamaica lags in all three financial development categories [inability to attract new small businesses, improve infrastructure to cut costs and overheads, and increase competition]; both depth and access are weak in Jamaica but it scores particularly lower on efficiency driven by the high overheads, spreads and margins.”

The suggestion, therefore, is that the spreads in rates would be narrower if there was improved efficiency in the banks’ infrastructure. It goes without saying that where there is inefficiency there will be high costs. It is true that the banks in Jamaica have done a great deal to improve their service delivery to customers. In some instances, certain efficiencies that have been achieved, especially in technology infrastructure, are comparable to their counterparts in First World countries, but there is a great deal more to be done.

The banks cannot punish customers by passing on the consequences of their own inefficiencies onto them. Fees have now become an indispensable factor component in the bottom line of banks. Customers are no less taxed by the banks than are taxpayers by the Government. There is something very wrong with this picture. Having become accustomed to gargantuan profit margins over the past decade, the banks are not in any hurry to injure this cash cow.

The Opposition has been bleating loudly for the spreads to be narrowed, but an Opposition is not taken seriously unless it can be seen as a strong contender for Government. The Government seems reluctant to hurry the banks along and one does not expect to see any pressure placed on them in an election year.

Meanwhile, the hapless consumers continue to be at the mercy of the banks and other financial institutions. It is unconscionable in a world of almost zero interest rates in developed countries, and five per cent and below in many developing countries, that in Jamaica the deposit-lending rates average 14 percentage points. Which small and medium-sized enterprises or other small entrepreneur can borrow money at these exorbitant rates to start a business or fund an ongoing project? Not only are the rates high, but the collateral demand is pernicious in many respects. In its analysis, the IMF determined that in some cases the collaterals demanded for loans can be as much as 207 per cent above the value of the property.

The failure of the financial sector in the 90s continues to play a part here. The “duppy” of Finsac sits in every financial boardroom in this country, and this is one of the reasons why we need to have a comprehensive report on the collapse of the sector. Do not expect one from the present Government. It obviously has too much to hide and the general election, in any event, is just around the corner.

The banks are reported to be even reluctant to use the registry set up by the ministry of industry and commerce where a broader set of smaller entrepreneurs could be assisted to access loans. It cannot be in the enlightened self-interest of the banks or their shareholders to be forced by Government to make the well needed adjustment to their loan rates. It is not meritorious from a public relations standpoint that they do not possess the conscience to police themselves and do what most Jamaicans consider the decent thing to do: reduce the spreads. If the macro-economy targets are moving in the right direction, as many attest, there should be no fear of any major financial dislocation to render the banks impotent. Unless, of course, their own inefficiencies render them so. What we are witnessing in the spreads is inordinate greed.

It is time that banks step up and make a meaningful contribution to the nation’s growth instead of sitting in air-conditioned offices concocting ways, some of them bordering on the nefarious, to heap more burdens on the already beleaguered customers.

Dr Raulston Nembhard is a priest and social commentator. Send comments to the Observer orstead6655@aol.com.