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Financial blogger and senior manager for data and analytics at The Jamaica National Group, Gillian Jackson, is cautioning borrowers to carefully read all documents when applying for a loan, as some loans may have hidden fees and charges that will not be in the best interest of the borrower.

“Not all loans are created equal. Some lenders attract their borrowers by advertising an easy process, quick turnaround time. You can get a loan in hours instead of days, but you are paying the cost somewhere else,” she pointed out.

Ms Jackson gave the advice while addressing the ‘Get Smart About Credit’ workshop, organised by the JN Foundation Financial Academy. She was presenting on the topic ‘Helping you Understand Interest Rates’.

She pointed out that sometimes these loans attract high interest rates, use the add-on method of calculating interest; contain hidden fees and charges, such as penalties for late payments; and some lenders will not permit early repayment or even penalise persons for early repayments.

“Be wary of these loans that seem too good to be true. Loans that have associated collateral, such as a house or a car, would typically have lower interest rates than loans that do not,” she informed.

She cautioned consumers that while compound interest is very beneficial when someone is investing, in the context of borrowing, it can cause outstanding loan balances to accumulate rapidly, particularly for high interest rate loans. Compound interest is the interest calculated on the outstanding principal and the interest accumulated over the previous period of a loan or deposit. This means that interest is added onto both the loan amount and interest that was added the month before!

Ms Jackson advised that loans that use a reducing balance method of calculating interest will generally be better than the add-on method, as payments would be consistently lower for the same rate of interest. She further noted that loans that have a clear monthly repayment are also good for persons who are new to debt, or do not have a good track record of repayment.

“Always ask what your interest rate is [when applying for a loan]. Remember to shop around for the best interest rates,” she said.

Ms Jackson was among three presenters who addressed the workshop. The other presenters were Tamara Wilson, acting business development officer, CRIF Information Bureau and Rose Miller, lead of the Financial Empowerment Programmes at the JN Foundation.

The JN Foundation, ‘Get Smart About Credit’ workshop series is an initiative of the newly established JN Financial Academy, which is aimed at empowering Jamaicans to achieve financial freedom by providing information, training and mentorship.

The next workshop will be held virtually December 1 at 1:00 pm. Persons who have missed out on the first sessions are invited to visit the JN Foundation website, www.jnfoundation.com to register for the upcoming workshop.

Rose Miller, lead for Financial Empowerment programmes at the JN Foundation is stressing the need for business owners and individuals to carefully prepare for the loan application process to improve their chances of accessing credit. She noted that access to credit is key to wealth creation.

“The question you must ask yourself is ‘What is the level of my indebtedness?’ Am I [already] up to my neck in debt?’” she encouraged persons to ask themselves when assessing whether to borrow.

Mrs Miller was addressing the JN Foundation workshop ‘Get Smart About Credit’, recently at the JN Group Corporate Office on Oxford Road in New Kingston. The session was also streamed to registered participants.

She advised that it is important to assess either the business or one’s ability to service the loan being sought. If after preparing a budget it is clear that this loan repayment cannot be accommodated, immediate corrective measures must be implemented and in this instance part of the preparation to access credit entails reducing the level of one’s debt.

“You can start by paying off the debt with the lowest balance first, then move on to the next lowest while paying the minimum balance on all other debts, this is the debt snowball method. This method compares with debt avalanche where the debt with the highest interest rate is tackled first while paying the minimum balance on all other debts,” she informed.

She said the other option would be to go for debt consolidation. “When you have five or six loans, you can consolidate them at one institution: what that does is give you a little fiscal space each month. But I’m going to caution you, that fiscal space that you receive, it is not to be used to get into more debt. It is a time to hunker down and try and get some stability,” she stated.

To reduce and manage debt, she also encouraged persons to cut back on expenses and seek ways to increase streams of income, for instance, by monetizing one’s skills or hobbies.

Have all the necessary documents ready

Commenting further on preparing to access credit, Mrs. Miller emphasised that persons also need to pay attention to obtaining documents which will be necessary for the loan application process.

“Ensure you have basic documents – your Tax Registration Number (TRN), your ID, proof of where you live, these things [documents] will hold up your application process,” she noted.

Turning to some factors that will determine one’s eligibility for a loan, she cited the Five C’s of Credit – character, capacity, collateral, conditions and capital – that applicants should always bear in mind when seeking to borrow.

She said one’s character can be assessed based on one’s credit history- one’s pattern of loan repayment; while capacity is adjudged based on one’s ability to repay. Capital takes into consideration funds an applicant already has, the risk the borrower is willing to take on the transaction for which they are borrowing. It could also be an amount in reserve to support continued servicing of the debt in the event of an interruption in income. Conditions of the loan take into consideration the interest rate, tenure and method of repayment of the loan, among other things.

“Collateral is anything of value, an asset that is used to secure the repayment of debt in the event of a default on the loan,” she concluded her explanation of the Five C’s of credit and once again reminded the participants that there was no way to bypassing these in the process of applying for credit.

The JN Foundation, Get Smart About Credit workshop series is an initiative of the newly established JN Financial Academy, which is aimed at empowering Jamaicans to achieve financial freedom by providing information, training and mentorship.

The next workshops will be held virtually on November 17 and December 1. Persons who may have missed the first session are invited to visit the JN Foundation website, www.jnfoundation.com  to register for the upcoming workshops.

Jelica Thompson doesn’t make her situation define her, but rather she uses it to push herself to excel. The 12 year-old struggled to be present in her online classes during the pandemic because of a lack of devices to log into her classes, but she was able to find innovative ways to keep up with her class.

That determination and grit resulted in her excelling in the Primary Exit Profile (PEP) exams and being awarded the JN Scholarship for the parish of St Thomas to pursue her secondary education at Convent of Mercy Academy “Alpha”.

“It was difficult because half the time I didn’t have a device for myself. It was very challenging until my teacher loaned me a tablet,” she said, noting that she would ensure that she did the homework and activities that were present in the Google classroom.

She pointed out that with the support of her mother, her assignments would be submitted to the school for her teacher to mark. So even though she did not have an online presence, she was doing the school work.

Things got better for her when school returned face-to-face. Her hard work and determination paid off as she did exceptionally well in the PEP exams and attained a score of 356.3.

Her words of encouragement to students sitting the PEP exams is to: “never give up on what you want to be and always strive for excellence and work very hard.”

Jelica who wants to one day to become a lawyer is also passionate about the creative arts and would like to become a playwright. She is especially inspired by the work of Louise Bennett-Coverley, renowned Jamaican poet, folklorist and author.

She is the recipient of several Jamaica Cultural Development Commission certificates for debating competitions which she received while attending White Horses Primary and Infant School in St Thomas. She was also a member of the school team that placed second in the Region 2 Mathematics Video Competition in 2022.

She credits her success at PEP and being awarded a JN Scholarship, to her teachers Miss McDonald and Mrs Campbell and her mother. For her mother Jenhell Madden, Jelica’s success is not a surprise as she was always a good student.

“Jelica is a diligent worker, who continuously strives towards achieving excellence. She has excelled academically and maintained her place on the honour roll, which led her to become a member of the prefect body,” she disclosed.

The single mother of three is elated that her daughter was awarded a scholarship as she said this will assist in covering the finances related to her school work.

She also shared that parents have to take an active role in their children’s education to enable them to excel. “You have to put out your all for them. This means ensuring that the homework is done as the teacher alone cannot do it. Try to go through one-on-one with your child with the school work especially if they don’t understand it. If you the parent don’t understand find a friend, relative or neighbour who can explain it to the child,” she advised.

Jelica is one of 47 students to be awarded the JN Foundation PEP Scholarship and grants for 2022. Since 1983, The Jamaica National Group has been supporting the educational pursuits of hundreds of young people at both the secondary and tertiary levels.

Natalee Minott, mother of JN scholar, Tremain Wenden, is over the moon that both her sons are scholarship recipients of JN Foundation Primary Exit Profile (PEP) Scholarship awards.

Her first son, Trae Wenden, was the scholarship recipient in 2019 for the parish of Portland and now her younger son, Tremain, has also received the award for Portland for 2022.

“When I completed the application, it was minutes to midnight of the same day of the deadline and I said to myself ‘he is not going to get through because it is the last night’ so I was really in shock when I got the call from JN informing me that my son had received the scholarship,” she said.

The single mother of two said that it was the answer to her prayers, as the scholarship will assist with covering the expenses for his education.

“It [the scholarship] really take a lot off me as a single mother,” she said.

For Tremain, his hard work paid off. The future archaeologist said he ensured he went over his notes after each lesson so that he can keep ahead of the class.

The 12 year-old, who is attending Titchfield High School, is aspiring to travel the world one day. “I want to be an archaeologist because I like to explore and travel. I would like to one day visit the forest and jungles,” he said.

His advice to those studying for PEP next year is to go over their notes after each class and not to wait until the time of the exam. Tremain was adjudged highly proficient in all subject areas in the PEP exams.

The soft spoken student, who attended Tranquillity Primary School, and lives in the rural community of Coolshade District in Portland, said his brother played a critical role in his success as he would explain difficult areas of the syllabus that he did not understand.

“Trae (his brother) is like a father figure to his little brother. They are very close,” said Miss Minott, as she described the bond between the bothers.

Giving tips to parents preparing their children for the PEP exams, Miss Minott pointed out that it is important to understand a child’s learning style, as not all children learn through ‘chalk and talk’. Others learn through their environment.

“Sometimes you have to take children outside and teach them through nature or their environment. Make the content relatable. Children also need space as well, it is not just about books,” she said informing that Tremain is an explorer who likes to pull things apart and put it back together. 

Tremain is among 47 students who, this year, were awarded JN PEP scholarships and bursaries. Since 1983, The Jamaica National Group has been supporting the educational pursuits of hundreds of young people at both secondary and tertiary levels. The scholarship awards are one of its largest benevolent efforts.

Some 1,000 Jamaicans are being targeted to promote positive credit habits and overall good financial management habits through a series of training and engagement activities organised by the JN Foundation’s Financial Academy.

Rose Miller, lead for the Financial Empowerment programmes at the JN Foundation noted that three workshops will be hosted across the island to raise the level of financial literacy about this very vital tool, which, if used correctly, can build generational wealth.

The workshops are the first training sessions being offered by the newly established JN Financial Academy, which is aimed at empowering Jamaicans to achieve financial freedom by providing information, training and mentorship.

The sessions will be held virtually on November 3, 17 and December 1. Persons who wish to improve their understanding of credit products and develop better financial habits are invited to visit the JN Foundation website, www.jnfoundation.com and register to attend one of the three workshops.

“One of the issues we will explore at the workshop is smart management of existing debt obligations,” Mrs Miller noted. “Servicing loans, paying bills and honouring debt in a timely manner is important to nurturing responsible habits when it comes to borrowing money.”

‘Get Smart About Credit’ day, is a good time to challenge oneself to improve one’s credit score through better management of debt, she suggested.

Noting that many persons underestimate the importance being organised plays in managing their debt, Mrs Miller explained that when bills are kept in order and a system of payment established, the chances of missing a payment would be lower. This, she said, is important as overdue payments can be costly and also negatively affect one’s credit score, which is determined by consumption of credit products as well as payment history on bills and loans.

“You can repair or build a good credit score over time, by setting up a payment system to effectively manage your obligations. A simple way to get organised is to create folders for both electronic and physical bills and also setting payment date reminders,” she suggested.

She also pointed out that payment history is often tracked by financial institutions and credit bureaus.

“When a payment is missed, it’s reported by your creditor (the institution you owe), and the report they provide to the bureaus will affect your score almost immediately. Therefore, paying on time is a habit that you should develop and practise all the time.”

Mrs Miller emphasised that it’s important for people to develop the ability to identify and prioritise needs over wants at an early stage in their lives. This, she said, means making sure that all necessary obligations are taken care of first, and credit is used only when absolutely necessary. 

“Failure to prioritise needs over wants often leads to excessive indebtedness. We have to learn to borrow for productive reasons only,” she suggested.

She offers the following tips to help persons get smart about credit:

• Consider whether it is a good time to take on debt
• Ensure that your budget can comfortably accommodate the additional monthly obligation
• Examine how an additional loan will impact your financial security in the long run
• Consider whether there is an alternative to getting into or increasing your debt
• Make sure you have an emergency fund – you may have to turn to it to avoid late payments and the corresponding consequences like late fees and damage to your credit score
• Ensure that you read, understand and accept all the terms and conditions of the loan

“Understanding the terms and conditions of a loan is critical to being smart about credit. You have to know what you’re getting into,” she continued. “These are some of the things we will explore at our workshops. And, we will delve into other topics such as approaches to calculating interest on loans. It is not to be missed.” Mrs Miller asserted.

Get Smart About Credit Day is observed annually every third Thursday in October, falling on October 20 this year and was launched by the American Bankers Association in 2003.

Although Kasi Abbott, a first form student of Knox College in Manchester, has known for weeks that she is one of 47 students to be awarded the JN Foundation Primary Exit profile (PEP) Scholarship for 2022, she remains just as elated, as if she had only received the news yesterday.

“I feel like my hard work in PEP paid off. All the studying and preparation that I did have been rewarded with this scholarship that I received,” she said. 

The 11 year-old was among the 47 accepting their awards at a celebratory ceremony on Sunday (October 2) organised by JN Foundation at the Terra Nova All Suite Hotel in St. Andrew to recognise the achievement of the youngsters who came from across the country.

Held under the theme, ‘Reignite the Greatness in You’, Claudine Allen, general manager of the JN Foundation, urged the pre-adolescents to strive for “greatness.”

“As you embark on your educational journey, which will also help to mould your character, I urge you, all 47 of you, our scholars, to believe in yourselves and your ‘greatness’ and strive for excellence, just like Nelson Mandela did,” she charged.

Parris Lyew-Ayee, chairman of the JN Foundation, who also addressed the recipients, said that since 1983, The Jamaica National Group has been supporting the educational pursuits of hundreds of young people at both the secondary and tertiary levels. “This year we received close to 400 applications for the Primary Exit Profile (PEP) Scholarships. Unfortunately, we were unable to meet the needs of all the applicants, however,

fortunately, this year, we are introducing 10 one-time offer grants through, JN Money Services Limited,” he revealed.

Mr Lyew-Ayee underscored that an educated population is important to nation-building and economic growth and, therefore, investing in education should be priority.

Referencing the development of Japan after World War II and the emergence of Taiwan, he demonstrated how prioritising education can transform the fortunes of a nation. 

“The Japanese people committed themselves to building a first-class education system. The result was decades of impressive economic growth, during which Japan became an economic powerhouse and the world’s third-largest economy,” he said.

“We can become a great nation if we focus on building an educated population, and that is why the JN Foundation, in its own way, takes seriously its contribution to ensuring that our nation’s children are not denied an education,” he said.

The JN Foundation chairman disclosed that the Foundation will be recalibrating its scholarship programme, to further strengthen its relationship with its scholars. This he said included rolling out a mentorship programme to create a space where the scholars can interact with The JN Group senior leadership team.

“We encourage our scholars and parents to look out for this and other exciting initiatives and events that will be specifically catered with you in mind. Some of the other activities will include career development, networking among JN scholars as peers and financial literacy sessions, through our very soon to be launched, JN Financial Academy,” he said.

Ruth Lawrence, youth empowerment specialist, entrepreneur and author was guest speaker at the function and encouraged the recipients to “dig” for success.  “Young people your vision is not too big to achieve if you set your mind to it. Get your vision board and set it up. Believe in yourself that you can do it,” she said.