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TVA offers a $200 million customer credit to relieve COVID-19

This story was updated at 8:45 p.m. on Thursday, August 27, 2020, with more information.

For the second year in a row, the Tennessee Valley Authority is reducing the price of its electricity through rebates or credits to its customers after reducing its own debt and spending.

The federal utility said Thursday it will provide a special coronavirus pandemic relief credit of $200 million next year, equal to a 2.5% reduction on its base electricity rates. One year ago, VAT announced its intention to try to keep its electricity rates stable for the next decade and offered a 3.1% rebate to local power companies that signed long-term contracts with the utility.

TVA Chairman Jeff Lyash said Thursday that the credit aims to help communities and businesses recover more quickly from the current crisis. COVID-19[female[feminine pandemic and reflects TVA’s improved performance.

“The continued impact of this pandemic on our communities is unprecedented and creates continued economic uncertainty,” Lyash said. “The TVA team has just done a great job of constantly looking for ways to reduce costs and improve reliability, and they are poised to deliver a year of outstanding performance in fiscal year 2020 despite the challenges presented. by COVID-19[female[feminine.”

The virus forced costly changes to how TVA fueled its nuclear reactors and recovered from storm damage and is expected to cut the agency’s power sales this year by $300 million or more and limit sales again in the coming year.

But Lyash said TVA decided to offer the $200 million credit to distributors, in addition to providing ongoing support for its community assistance program and a special return-to-business credit, due to its better results. than expected this year and its long term. partnerships with most municipalities and electric cooperatives that distribute electricity in the TVA seven-state area.

With lower borrowing costs and debt reducing interest charges and more rainfall this year spurring cheaper hydroelectric generation, TVA has been able to deliver electricity at lower prices than there were. is ten years old while maintaining sufficient reserves to provide the additional credit, Lyash said. Over the past six years, TVA has cut annual operating expenses by more than $800 million through cuts to staff, programs and technology, he said.

TVA reported net income of $652 million in the first nine months of the fiscal year while paying down debt to the lowest level in 30 years, TVA chief financial officer John Thomas said.

The credit for the coming year has been welcomed by local power companies, who will determine how the rebates will be spent to lower prices, offset higher expenses or extend utility cut-off moratoriums passed by the government. most utilities this spring during the worst of the pandemic. slow-down.

Doug Peters, president of the Tennessee Valley Public Power Association — which represents TVA’s 154 distributors — welcomed the TVA credit and flexible regulations on how the money will be spent.

“We commend TVA’s leadership for easing the financial strain this pandemic has placed on TVPPA members by supporting them with the Pandemic Relief Credit,” he said. “We further commend TVA for entrusting the decision-making regarding the use of these funds to local power companies so that they can make decisions based on their unique knowledge of the needs of their business and community. .”

In Chattanooga, EPB used its refund last year to begin pursuing construction of a battery storage or solar farm on the northern edge of its service territory. EPB Chairman David Wade said the new VAT credit underscores the value of America’s largest public service.

“Actions like these set TVA and the public energy model apart by demonstrating a clear and responsive commitment to join local power distributors in putting people and communities first,” Wade said.

The EPB has suspended power cuts for non-payment and waived its late fees since March due to financial hardship caused by the pandemic. EPB matched donations from TVA to also support local efforts to help those injured or threatened with eviction from their homes due to the economic downturn.

“Throughout this time, we have worked with nonprofit and public partners to identify sources of assistance, including special programs that have been put in place to help people cope with the COVID-19 crisis. COVID,” EPB Vice President J. Ed. dit Marston said. “We have also partnered with Centraide and engaged TVA in a campaign to support the United Way Restore Hope fund to provide financial assistance to those impacted by the COVID crisis, many of whom had never asked for help before.

While EPB has suspended power cuts, other TVA distributors have or soon plan to reinstate power cuts for those who do not pay their electricity bills.

A coalition of environmental groups wants TVA to act as a regulator of local distributors to suspend any customer cuts. In a petition delivered to TVA this month, dozens of climate justice organizations called on the agency to impose a moratorium on power cuts in the region and fund debt relief for its clients.

“Faced with a health, environmental and economic crisis unprecedented since the Great Depression, we are asking TVA to return to its original mission of improving the quality of life here in the Tennessee Valley,” said Brianna Knisley, coordinator of the Tennessee campaign. with the voices of Appalachia. “TVA can and should protect vulnerable communities from power outages.”

The petition urges TVA to reallocate its resources to help customers pay their bills and fund a fair economic recovery through clean energy and energy efficiency programs.

“In the midst of a pandemic, when people are unemployed and without basic needs like electricity, food, water and broadband services, TVA has a responsibility to support its customers by establishing a moratorium on closures service provider, confirming its original mission to serve the people of the Tennessee Valley,” said Isabella Killius of Sunrise Tennessee.

Lyash said local power companies, which are governed by locally elected or appointed trustees who are closest to each community and its needs, should have the flexibility to determine how best to spend the $200 million credit. dollars.

In addition to the pandemic relief credit, TVA is making another contribution of $2 million to the Community Relief Fund set up in April. Similar to the initial contribution, these funds will be matched by local power companies and other community groups for the benefit of local organizations that help families and businesses most in need. Earlier this year, similar matching funds eventually provided more than $4.5 million to nearly 300 groups in the region, TVA Vice President Buddy Eller said.

Contact Dave Flessner at [email protected] or 423-757-6340.

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AFCC Debt Settlement Market Share, Analysis by Product, Application, End Use, Regional Outlook, Competitive Strategies and Forecast to 2025

AFCC Debt Settlement Market Share, Analysis by Product, Application, End Use, Regional Outlook, Competitive Strategies and Forecast to 2025

The report on AFCC Debt Settlement Market provides a comprehensive overview of the business scenario, with emphasis on the various growth drivers, bottlenecks, challenges, and opportunities defining the growth matrix during the forecast period.

According to the study, the AFCC debt settlement market is expected to register a CAGR of xx% over the period 2020-2025.

It further draws on expert knowledge to analyze various market segments and provide readers with insights into regional outlook and competitive scorecard. The report also explains the impact of COVID-19 on industry trends and suggests action plans to make the most of the situation.

Request a sample copy of this report @

Market Overview:

Regional range:

  • The business intelligence document divides the AFCC debt settlement market into regions, namely Americas, APAC, Europe, and Middle East & Africa.
  • Factors influencing regional growth and each geography’s revenue contribution to the overall industry assessment are involved.
  • Projections on the growth rate and market share held by various regions over the analysis period are presented.

Product scope:

  • Various products being considered for AFCC debt settlement market research are Credit card debt, student loan debt, medical bills, apartment leases and more.
  • The consumption pattern for each type of product is revealed in the report.
  • Additionally, data related to sales volume, revenue generated, and industry share represented by each product segment are elucidated.

Scope :

  • The range of applications, based on the product offerings of the AFCC Debt Settlement market, is Business and Personal.
  • The product consumption volume and value for each application segment are detailed in the report.
  • It further reveals the market share achieved by each type of application in the past and predicts the same for the coming years.

Competitive hierarchy:

  • The report conducts an in-depth survey of AFCC debt settlement market giants including National Debt Relief, American Debt Solutions, Rescue One Financial, Freedom Debt Relief, Pacific Debt, ClearOne Advantage, Guardian Debt Relief, Accredited Debt Relief, America Debt Resolutions, CuraDebt Systems, Consumer First Financial, CreditAssociates, Americor Financial , Century Support Service, Beyond Finance, Consumer Debt Help Association, and Atlas Debt Relief, which define the company’s competitive dynamics.
  • Basic information such as profiles and product offerings of each company are provided.
  • Figures related to unit price model, sales volume achieved, gross profit and company industry are included.
  • Knowledge regarding areas of operation and distribution channels deployed by industry competitors is disclosed.
  • An update on the latest happenings in the market, such as mergers and acquisitions, collaborations and partnerships, and new launches, is also on display.

Summary of key indicators

  • Competitive Scoreboard: The study documents the business profiles of major players, while focusing on the products offered by these companies, product specifications, production capacity, sales data, gross margin and revenue generated during the the forecast period.
  • Global and Regional Market Research: Dominant trends and projections on the valuation along with growth graph of global and regional market size over the analysis period are enlisted, based on export and import patterns and production trends and of consumption for each specified country and region.
  • Product land: The report brings together different product segments and provides information about their specifications, as well as sales volume and value.
  • Application spectrum: Several applications of the products are mentioned in the report, which further elucidates the market share held by each type of application and their revenue contribution in the subsequent years.
  • Additionally, the report leverages expert opinion to inform the reader on existing market trends, drivers, opportunities, and challenges influencing company sizing, and Porter’s Five Forces Analysis on the competitive landscape.

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Thousands of scammed student loan borrowers have filed for debt relief — the feds haven’t approved any in over a year

Over the past year, the Department of Education has received tens of thousands of applications for student debt relief from borrowers who say they were scammed by their schools.

The agency has not approved any.

That’s according to data obtained from the Department and released Wednesday by the office of Senator Patty Murray, the ranking Democrat on the Senate Health, Education, Labor and Pensions Committee, which oversees the Department.

Between June 30, 2018 and March 31, 2019, more than 74,000 requests for debt relief poured into the agency.

As of March 31, 2019, the Ministry has received 239,937 requests for debt relief from these borrowers with 179,377 requests pending. As of that date, the agency had approved 47,942, a number that hasn’t budged. since June 30, 2018. The number of refusals has also not increased since the end of June 2018.

But the number of applications received by the Department during this period has steadily increased. Between June 30, 2018 and March 31, 2019, more than 74,000 requests for debt relief poured into the agency.

Murray derided the Department’s inaction on the claims as “shameful,” in a statement. “There is nothing stopping Secretary DeVos from immediately approving the claims except her apparent disdain for borrowers, and I will continue to urge her to provide students who have been cheated or defrauded by predatory for-profit colleges the relief that they are entitled.”

Critics of the Trump administration have derided the Department’s approach to the borrower advocacy process and say it’s part of a larger DeVos-era agency scheme favoring college interests. for profit relative to the borrowers. Earlier this year, the agency repealed a rule developed by the Obama administration that was intended to ensure that graduates of vocational training programs – which are mostly at for-profit colleges – earned enough to repay their loans.

The data is the latest development in a battle over the fate of borrowers who have been scammed by their schools.

The fight over the future of for-profit colleges even reached the Democratic debate stage in Detroit on Tuesday night. In response to a question about why he does not support Sen. Bernie Sanders’ proposal to write off all student debt, South Bend, Indiana Mayor Pete Buttigieg said that if he were to write off the debt, it would “start with for-profit colleges.” that took advantage of people, especially veterans.

“Under President Obama, they were held accountable for their results,” he said. “President Trump, under the direction of a Secretary of Education who, unfortunately, is from this state, removed these rules,” he said. “There is no accountability.”

The data released by Sen. Patty Murray exclusively to MarketWatch is the latest development in a years-long battle over the fate of borrowers who have been scammed by their schools into debt. Under a law, known as the repayment defense, these borrowers have the right to have their federal student debt forgiven.

But the law, which has been on the books since the 1990s, was only widely used in 2015, when former students from the now defunct for-profit chain Corinthian Colleges, organized by activists, started asking for help under the law. This pressure helped convince the Obama administration to create a more formal process that borrowers could use to file claims for relief.

The Department of Education under Education Secretary Betsy DeVos tried unsuccessfully to rewrite the rules. The agency and DeVos are also facing a class action lawsuit from borrowers, accusing officials of unlawfully blocking their decision on their claims.

Borrowers describe how their debt has prevented them from buying homes, and even delayed marriage or children.

In nearly 900 affidavits submitted as part of the lawsuit earlier this month, borrowers describe how their debt prevented them from buying homes or cars and delayed major life events, such as marriage or children. . They allege for-profit colleges tricked them into attending and going into debt to pay for it with the promise of a better future. In fact, many say they are worse off than before their participation.

Liz Hill, a spokeswoman for the Department, wrote in an emailed statement that ongoing litigation has prevented the agency from adjudicating the claims. The agency was sued last year over a plan to use a formula to determine whether certain borrowers who attended Corinthian colleges and filed borrower defense claims might be eligible for a partial discharge from their loans instead of a complete discharge.

A federal district court judge ruled last year that the Department’s approach violated the Privacy Act and ordered the agency to stop collections on former Corinthian students while legal issues are settled. The government appealed the decision, Hill noted. But with the Department’s process for determining a borrower’s level of harm “held in court,” Hill wrote, the agency cannot move forward with assessing claims.

“The department has a duty to protect students from fraud while safeguarding taxpayer dollars,” she wrote.

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Debt and the Economy – Journal

Most national debt indicators are worrying. Significantly reducing the national debt over the remaining two-and-a-half years of the PTI government appears difficult in the wake of the global economic downturn triggered by Covid-19, domestic political instability and worsening geopolitical challenges. That means the economy, which is already struggling to recover from last year’s 0.4% contraction, could continue to suffer from anemic growth.

This is something that policy makers have apparently understood. After resorting to large net foreign and domestic borrowing during the first two years of the PTI government, they are now also trying to raise financial resources which have little or no impact on the level of debt. national. Attracting diaspora income through both remittances and portfolio investments, privatizing state-owned enterprises (EPs), encouraging foreign direct investment (FDI) and attempting to increase tax and non-tax revenue are efforts centered around this objective.

But the volumes of debt are huge and servicing them is expensive. These efforts also require additional debt relief and support from international creditors in the event of external debt and a cautious use of new borrowing in the event of domestic debt.

The economy grew only 1.9% in 2018-19, the first year of the PTI government, compared to 5.5% in 2017-18, the last year of the PML-N government, shared by the interim configuration put in place. in place to organize the general elections of July 2018. .

Debt servicing cost expected to remain lower than last year due to relatively stable exchange rate and lower interest rates

But even this weak growth of 1.9% came at the cost of a 34.6% year-on-year growth in the country’s debt and total liabilities (external and internal), which rose from 29.88 trillion rupees in 2017-2018 to 40.22tr in 2018. -19.

Such weak growth amid a massive accumulation of national debt betrayed the quality of economic management, especially since it all happened before the emergence of Covid-19. What has been more disappointing is that a sharp increase in the government’s domestic and external debt – and not in other components – contributed strongly to this expansion in total national debt and liabilities. This worsened the economic situation in 2019-20, especially after the pandemic hit Pakistan. (The government’s domestic debt rose to Rs20.73tr in 2018-19 from Rs16.41tr in 2017-18 and the rupee equivalent of its external debt also rose to Rs11.05tr from Rs7.79tr.)

This was bound to increase the total debt service need in 2019-20 and it did. In 2019-20, Pakistan had to devote 55% of its tax revenue to servicing domestic and external debt alone. Even in 2018-19, 47% of tax revenue was spent on this, according to budget documents.

When debt service absorbs the bulk of tax revenue, policy trade-offs become limited and painful. The development agenda cannot be pursued well, unemployment cannot be contained, industrial growth cannot be accelerated, agriculture cannot be sufficiently supported, and the service sector must be left to fend for itself. This all happened in 2018-19 and with heightened intensity in 2019-20 – as the first wave of Covid-19 hit the country in the final four months of the fiscal year.

At the start of 2019-20, the PTI government approached the International Monetary Fund (IMF) for balance of payments support after more than a year of dithering. The economic discipline imposed by the IMF has helped the government to limit the growth of its external and internal debt.

As a result, the annual growth rate of total external and domestic debt and liabilities fell to 10.8% in 2019-20 from 34.6% in 2018-19. The government’s external debt (less that of the IMF) increased only slightly from Rs 11.05 tr in 2018-19 to Rs 11.82 tr in 2019-20. Even a huge net increase of around Rs 3.1 trillion in domestic debt in 2019-20 was less than its net domestic borrowing of Rs 4.3 trillion in 2018-19.

Although some national debt indicators showed signs of improvement in the first quarter of 2020-2021, it is too early to predict whether the trend will be able to continue throughout the year. A simple thing to remember is this: the growth of domestic debt can be contained if the tax base widens, if sufficient tax revenue is generated and if current expenditure remains under control. An expansion of external debt can be controlled if foreign exchange earnings from exports, remittances and FDI grow quickly and quickly. An expansion of the tax base and increased tax revenue generation seem less likely due to slow economic growth amid the second wave of Covid-19.

Political instability can also weigh heavily on exports and FDI. Remittances to countries of origin may, however, continue to increase for some time, thanks to effective controls on illegal money transfers and incentives for the Pakistani diaspora to use remittances to invest in securities. government debt and housing programs. Overall, the government’s external and domestic borrowing stock will not decline significantly during the current fiscal year.

But the cost of debt service will certainly remain lower than last year due to a relatively stable exchange rate and the decline in interest rates from 13.25% to 7% between mid-March and the end of June 2020.

The rupee had lost 34.2% in value against the dollar in 2018-19 and another 3.1% in 2019-20. This massive depreciation in 2018-19, followed by a further marginal decline in the value of the rupee in 2019-20, significantly increased the cost of servicing external debt compared to the previous two years, namely 2016-17 and 2017-18.

By contrast, lower interest rates kept domestic debt service costs under control in 2019-20 and the first half of 2020-21.

Debt concerns persist and may even worsen if the rupee begins to decline and its full depreciation over the next two quarters becomes significant. Or if interest rates start to rise and hit double digits. But there is no indication that such things can happen during this exercise.

Posted in Dawn, The Business and Finance Weekly, December 14, 2020

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Chinese media welcome PM Imran’s call for debt relief

Pakistan’s envoy to Beijing hopes world leaders will avoid isolationism for good


Prime Minister Imran Khan’s call for a debt relief initiative for heavily indebted developing countries served as a rallying call for the world to unite in the pursuit of mitigating the negative impact of the Covid-19 crisis, China Global Television Network (CGTN) reported Wednesday.

In a video message posted on Twitter over the weekend, Imran called on the international community to launch a debt relief initiative to help developing countries prevent the negative impact on their people as subsequent humanitarian consequence of the pandemic.

Chinese media noted that there was a precarious situation in the South Asia region, not only in Pakistan, but also in India and Bangladesh as well as other developing countries elsewhere in the world.

74 million people in Arab world lack handwashing facilities: UN

These people obviously need food, but unfortunately cannot afford it. Their governments, saddled with heavy debt, may struggle to help everyone on the scale required. “Therein lies the significance of Prime Minister Imran Khan’s appeal to the international community,” the report added.

Pakistan’s Ambassador to China Naghmana Hashmi said in an interview with On Wednesday, international financial institutions, with the coordination of developed countries, were to offer emergency grants and soft loans to cushion the developing country from the ensuing economic crisis.

“The present situation [virus-induced shut down of economic activities]therefore calls for greater international coordination and cooperation within the global community to curb and completely eliminate this threat,” Ambassador Hashmi said.

“Perhaps this crisis, colossal as it is, reaffirms our resolve in multilateralism and gives world leaders the clarity and courage to avoid isolationism for good and renew faith in joint efforts for a shared and prosperous future for all,” she added.

Japan urges citizens to self-isolate as reports warn of 400,000 deaths

“This crisis should be a moment of reflection for us to revisit and revise our previous concepts on transnational health, environment and economic issues and reform them in light of emerging realities for the benefit of all humanity” .

Hashmi said China’s success against the virus was a source of inspiration and hope for all countries battling Covid-19. “China has become the only country in the world that has effectively curbed this disease,” she said.

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Angola cuts oil shipments to China as it pushes for debt relief

LUANDA: Angola has cut the number of oil shipments it will ship to Chinese state-owned enterprises to repay debt to Beijing as it seeks to renegotiate repayment terms to deal with pandemic fallout, officials said three sources familiar with the matter.

Angola said this week it had requested G20 debt relief and was in advanced talks with some oil-importing countries on adjusting financing facilities, but did not expect any further debt review is needed beyond that.

The global economic downturn due to the coronavirus pandemic pushed Brent oil prices to their lowest levels since the late 1990s and U.S. oil futures into negative territory for the first time in history.

Falling prices have put heavily indebted Angola in a fragile state as it derives a third of state revenue from oil.

By far, its biggest creditor is China. Analysts say Angola has more than $20 billion in bilateral debt, with the lion’s share owed to China. Much of the money was borrowed to build roads, hospitals, houses and railways across the African country.

In addition to its Chinese debt, Luanda secured a $3.7 billion loan from the International Monetary Fund last year and state oil company Sonangol borrowed $2.5 billion from banks between late 2018 and mid-2019. , the IMF said.

A global oil production cut deal led by the Organization of the Petroleum Exporting Countries (OPEC) has compounded Luanda’s woes.

As a member of OPEC, Angola has come under pressure to cut its oil exports from May. The result left the country with fewer and less valuable shipments to divide between paying off its Chinese debt and filling its depleted coffers.

The sources said China’s state-owned Sinochem will receive five shipments in July, up from the usual seven or eight, while Chinese giant Sinopec’s trading arm, called Unipec, will receive none. Unipec usually receives two to three shipments for debt repayment.

Sonangol, the Angolan Ministry of Finance, Sinopec and Sinochem did not immediately respond to requests for comment.

China’s Foreign Ministry said on Wednesday that relevant departments are in contact with Angola over its request.

“These oil-backed loans create a stronger interdependency (between lender and borrower) than traditional financing. This cargo diversion tactic is not new as seen elsewhere,” said David Mihalyi, senior economic analyst at the Natural Resource Governance Institute.

Angola is not the only African country heavily indebted to China. The IMF and ratings agency Moody’s have raised concerns about debt levels in sub-Saharan Africa, particularly vis-à-vis China.

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Governor signs vet debt relief bill

Above: Governor John Hickenlooper signs the Veterinary Education Loan Repayment Program on June 5, 2017, as Dr. Lora Bledsoe, Dr. Mark Stetter, Rep. Joann Ginal, Dr. Sam Romano and Leo look on. Boyle. (Photo provided by Richard Schweigert)

A survey of CSU veterinary graduates reveals that they tend to stay in the West. (Map by CSU DVM Services)

Signed into law by Governor John Hickenlooper on June 5, 2017, the Veterinary Education Loan Repayment Program paves the way for veterinarians to work in rural communities where large and small animals and their owners need services. professionals.

Like most accomplishments in rural Colorado, the passage of the bill is the result of the hard work of a group of people deeply attached to agriculture. With bipartisan support from Representative Joann Ginal (D-Fort Collins) and Senator Jerry Sonnenberg (R-Northeastern Colorado), and contributions from the State Department of Agriculture, the Colorado Cattlemen’s Association and the Colorado Veterinary Medical Association, Dr Mark Stetter and leaders of the College of Veterinary Medicine and Biomedical Sciences successfully pushed the bill through the governor’s office.

“Dr. Mark Stetter, Dr. Ashley Stokes and their team have a comprehensive and holistic view of the state that has really inspired people to work together,” said Dr. Sam Romano, Chairman of the Colorado Veterinary Medical Association and a 1983 alumnus of the CSU veterinary program. “The folks at CSU are doing a wonderful job putting their efforts where they are, helping people and animals.”

Intern Daniel Jackson and fourth-year veterinary students Jennifer Milner (blue) and Katie Powell (pink) visit Morning Fresh Dairy during their weekly visit to the primary care ward.  Local commercial dairy farms are used as teaching laboratories for 3rd and 4th year veterinary students.  The College of Veterinary Medicine and Biomedical Sciences' Outpatient Dairy Service works with commercial, on-farm and hospital dairy farms, providing a comprehensive primary care veterinary service, January 26, 2015.
Jennifer Milner and Katie Powell, veterinary students at Colorado State University, visit Morning Fresh Dairy during their weekly visit to the primary care ward. Local commercial dairy farms are used as teaching laboratories for third and fourth year veterinary students. (Joe Mendoza/CSU Photography)

With more than 34,000 farms on nearly 32 million acres, Colorado agriculture consistently ranks among the state’s top three industries, providing more than 173,000 jobs, contributing more than $40 billion to the state economy every year and fueling the world with nearly $2 billion. in exported products, according to the Colorado Department of Agriculture.

But there is a serious shortage of large animal veterinarians in rural communities. “I hope this loan repayment program will provide students with additional opportunities to ease their debt burden and move forward in helping our agricultural producers meet their veterinary needs,” the state said. Agriculture Commissioner Don Browna third-generation farmer in Yuma, Colorado.

Trusted professionals

Like their counterparts in human medicine, veterinarians are trusted professionals who help bond a community by caring for animals, supporting their owners, and protecting the food supply. “Vets work very closely with doctors, communities rely on them. This bill helps hold the fabric together in rural Colorado and keeps it from fraying even further,” Romano said. “Beef production and agribusiness are important to this state. Meat and milk don’t appear in King Soopers by accident.

Mark Stetter, Dean of the College of Veterinary Medicine and Biomedical Sciences, Colorado State University, October 26, 2016
Dr. Mark Stetter, Dean, CSU College of Veterinary Medicine and Biomedical Sciences

Speaking from his experience running his family farm in Sterling, Colorado, Sonnenberg saw the need for veterinary care first hand.

“Rural Colorado and agriculture are highly dependent on veterinarians,” he said. “It takes a special person to practice in rural areas and many choose another option due to financial obligations after university. I can’t wait to see how many students this will inspire to practice in rural communities.

After the governor appoints a board to review applications, veterinary graduates beginning in 2017 can apply for up to $70,000 in student debt relief. Here’s how it works:

  • They must be licensed by an accredited veterinary doctor
    medicine School
  • Currently live in Colorado or at one time lived in
    Colorado for at least 3 years
  • Agree to practice veterinary medicine for up to four years in
    a rural area of ​​the state that is experiencing a shortage of
    veterinarians appointed by the board to participate in
    the program

“One of the things I’ve learned through this process is that young vets’ debt is almost $150,000, and what’s holding them back from working in rural areas is the need to pay that off. debt,” said Ginal, who earned her doctorate. D. in Reproductive Endocrinology from Colorado State. “There are a lot of farmers and ranchers who need vets, and that’s an incentive for those who want to practice in rural Colorado. I am really proud that we passed this bill.

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SEC orders finance companies to extend debt relief to customers

Since the start of the lockdown in March, the government has ordered lenders to extend debt relief to help struggling borrowers during the economic downturn. — PHILIPPINE STAR/EDD GUMBAN

FINANCING COMPANIES, loan companies and microfinance non-governmental organizations (NGOs) are required to implement a one-time 60-day grace period for all loans due within the year.

In a notice dated September 21, the Securities and Exchange Commission (SEC) reminded finance and loan companies and microfinance NGOs to comply with Republic Act No. 11494 or the Bayanihan to Recover As One Act (Bayanihan II), which provides a one-time, 60-day grace period for all loans maturing on or before December 31, 2020.

The law, signed by President Rodrigo R. Duterte on September 11, includes a provision to help borrowers who may have difficulty repaying their loans due to the coronavirus pandemic.

The 60-day grace period will be granted for the repayment of all types of loans, whether single or multiple.

Lenders cannot charge borrowers interest on interest, penalties, fees or other charges during the 60-day period. Lenders are also required to invalidate any waivers that may be signed regarding the implementation of a grace period for Covered Loans.

“The parties may agree to a grace period in excess of 60 days and/or to payment of accrued interest on a staggered basis beyond December 31, 2020,” the SEC said.

Even with debt relief, borrowers can choose to pay accrued interest for the one-time grace period on a staggered basis until the end of the year.

In addition to SEC-supervised lenders, other financial institutions such as banks, quasi-banks, real estate developers, insurance companies, provident companies, in-house finance providers, and asset management companies assets and liabilities are required to implement the 60-day grace period. Government institutions such as the Utilities Assurance System, Social Security System, and Pag-IBIG Fund are also covered.

Since the widespread lockdown began in March, the government has repeatedly ordered debt relief from lenders to help struggling borrowers during the economic downturn.

Some of the lenders that have implemented loan repayment grace periods are BDO Unibank, Inc.; Metropolitan Bank & Trust Co.; Bank of the Philippine Islands; Rizal Commercial Banking Corp.; UnionBank of the Philippines; East West Banking Corp.; China Banking Corp.; CIMB Bank Philippines; and the Philippine Savings Bank. — Denise A. Valdez

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US Treasury to push COVID stimulus, Chinese debt attendance at IMF meeting – official

WASHINGTON (Reuters) – The U.S. Treasury will urge countries to keep the coronavirus stimulus going at annual meetings of the International Monetary Fund and World Bank next week and will urge China to participate fully in debt relief for poor countries , said a senior Treasury official.

Brent McIntosh, general counsel, U.S. Department of the Treasury, speaks at the 2019 Milken Institute Global Conference in Beverly Hills, California, U.S., April 29, 2019. REUTERS/Lucy Nicholson/Files

In a video interview recorded Tuesday and released Friday, Treasury Undersecretary for International Affairs Brent McIntosh said a strong recovery from the COVID-19 pandemic depended on continued political support.

“We can’t declare victory at this point, we have to keep pushing for reactive measures,” McIntosh said. here Mark Sobel, US Chairman of the Official Monetary and Financial Institutions Forum, a London-based think tank. “So I think our first message at the meetings will be that countries should not withdraw their support prematurely.”

McIntosh said in Tuesday’s interview that he hopes U.S. Treasury Secretary Steven Mnuchin and House of Representatives Speaker Nancy Pelosi can reach an agreement on a new U.S. coronavirus aid package.

Finance officials from the 189 IMF and World Bank member countries will meet virtually next week to discuss the global response to the pandemic and prospects for economic recovery. They will also try to negotiate new measures to strengthen debt relief in order to avoid default crises in poor and highly indebted countries.

IMF Managing Director Kristalina Georgieva said $12 trillion in fiscal stimulus, along with massive monetary easing, made the outlook “less dire” than in June, but the global economy is still facing a difficult exit from a pandemic-induced recession.


McIntosh said he would pressure Chinese officials to “fully, faithfully and transparently respect” the G20 freeze on official bilateral debt service for the world’s poorest countries implemented this year. .

“China is the biggest bilateral lender here. And so what we need to see from official bilateral lenders is transparency, not imposing non-disclosure agreements, not using secured funding.

He said China should adhere to mutually agreed definitions of official bilateral creditors to include any entity “working at the request of the government”, including government ministries, development finance institutions and credit agencies. export, among others.

McIntosh said the Trump administration still opposes a blanket allocation of new IMF special drawing rights — a move akin to “printing” hundreds of billions of dollars in foreign exchange reserves for all members — because it is not a “targeted or temporary” measure.

But he said the Treasury was encouraging wealthier countries to contribute unused SDRs to an IMF fund to help poorer countries. The Treasury is working with the White House Office of Management and Budget to determine what U.S. assistance package might be offered in this area, he said.

Reporting by David Lawder; Editing by Chizu Nomiyama, Andrea Ricci and David Gregorio

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Credit card debt and the COVID-19 pandemic Pushing BC

VANCOUVER, British Columbia, Jan. 11, 2021 (GLOBE NEWSWIRE) — Sands & Associates, British Columbia’s largest licensed insolvency trustee firm serving individuals and small businesses, today released results from the 2020 BC Consumer Debt Study. This unique annual study surveyed more than 1,800 consumers across the province who have declared bankruptcy or consolidated their debts through a consumer proposal.

In addition to examining the causes of debt and the often serious repercussions for British Columbians struggling with debt, the 2020 BC Consumer Debt Study found that:

  • More than 55% of BC residents surveyed who eventually consolidated their debts with a consumer proposal or filed bankruptcy for debt relief said credit card debt was the main type of debt they had – well ahead of other types of debt such as lines of credit (11%) and tax debt (10%).
  • the The COVID-19 pandemic was a contributing factor for more than half (54%) of plan members who have filed for insolvency since BC’s major lockdown in March 2020. 58% of these consumers noted that the pandemic has caused a loss of income, making unmanageable pre-existing debts.

Other notable findings from the 2020 BC Consumer Debt Study include:

  • Debt problems may disproportionately impact BC renterswith less than 6% of respondents describing their housing situation as “owner”.
  • More … than two-thirds (66%) of people worried about meeting their basic needs before formally settling their debt.
  • Despite the severe repercussions of uncontrollable debt, 95% of participants did not immediately seek professional help.

The complete and detailed study report and infographic of the main results can be viewed here.

PDFs are available here:

Perhaps one of the most important insights uncovered in the 2020 British Columbia Consumer Debt Study highlights some alarming realities for consumers in debt. Some critical highlights include:

  • More than 3 in 4 respondents said their debt-related stress had led to anxiety or depression.
  • About 1 in 6 people said the stress of debt caused them to have suicidal thoughts.
  • More than 3 in 5 participants said “overwhelming stress” was the indicator of how they knew their debts were a problem.
  • More than two-thirds of study participants said their self-esteem had suffered because of their debt, and 65% said their health had suffered.
  • Nearly 70% of respondents indicated that their relationships with family and others were negatively affected by being in debt.

According to Sands & Associates Senior Vice President and Licensed Insolvency Trustee Blair Mantin, “The COVID-19 pandemic has hit some already vulnerable consumers like a freight train. Although payment deferrals and income replacements like CERB mitigated the initial impact, it was surprising to learn that the pandemic was a factor in more than half of the insolvencies filed since March 2020. Unfortunately, one should not not much to push people into financial crisis where they can no longer repay their debts, or into situations where they feel they have to choose between paying their debt or meeting basic living expenses. As the deferrals come to an end and government income replacements are made more restrictive, we expect to see a wave of consumers who are barely hanging on now take the necessary step to restructure their debts in 2021.”

“Too often people focus on the numbers and not enough on the issues that cause and accompany debt. We want consumers to know they have support, where qualified solutions are, and most importantly, that there is light at the end of the tunnel.

Highlighting the emotional and psychological impacts of debt, he notes:

“This study is in its eighth year, and every year we hear that people simply didn’t know what their options were – or where or how to get help without fear of judgment or shame. Debt still brings a lot of shame and confusion for consumers. If a friend came to you and told you that he was suffering from anxiety and depression, that he was having trouble paying a credit card he used to make ends meet, or because his partner or his child was sick, or that he had lost his job, would you react? with judgment or criticism? No of course not.

Normalizing the conversation around debt and its impacts is essential here. Accepted silence allows negative self-talk to overwhelm people, and on top of that, confusion allows noise from the unregulated debt industry to clutter access to legitimate legal debt solutions. We have to keep trying to get the message out, we have to do a lot better for British Columbians.

He urges consumers, “Don’t wait until you’re constantly in debt and anxious about your financial situation to seek advice. I really encourage everyone to explore their legal debt options with a Licensed Insolvency Trustee – and above all know that you are not alone.

Click here to read the full report of the 2020 British Columbia Consumer Debt Study in PDF format.

PDFs are available here:

Sands & Associates is British Columbia’s largest licensed insolvency trustee firm focused exclusively on debt relief services for individuals and small businesses. A multi-year Consumer Choice Award recipient and industry leader, Sands & Associates takes a caring and caring approach to debt relief services, with a focus on improving the knowledge and personal empowerment of consumers.

Sands & Associates’ Annual studies of consumer debt in British Columbia aim to provide insight into the financial challenges faced by people across the province and highlight the human elements of a debt problem, which are too often overshadowed by numbers and statistics. The annual studies continue to aim to dismantle misconceptions of “who has a debt problem” and work to de-stigmatize conversations about debt and financial literacy.

Blair Mantin, Licensed Insolvency Trustee
[email protected]

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Pennsylvania is sitting on billions in coronavirus relief money. What is the delay? PA projector

PA projector is an independent, nonpartisan newsroom powered by The Philadelphia Inquirer in partnership with the Pittsburgh Post-Gazette and PennLive/Patriot-News. Sign up for our free weekly newsletter.

Update, May 28: On Thursday, lawmakers approved the use of $2.6 billion in discretionary federal stimulus dollars for a variety of purposes, including providing relief to hard-hit counties and long-term care facilities. Read more.

HARRISBURG — After enduring more than two months of the coronavirus pandemic and with state revenues continuing to fall, Pennsylvania has yet to spend $3.9 billion in discretionary federal stimulus dollars intended to help the relief effort.

The kitty is by far the largest available to the state and the most valuable. And while it currently cannot be used to offset lost revenue – which is expected to reach $5 billion by next June – there is hope in some corners that the rules could change.

The second unknown is whether Congress and President Donald Trump will agree on another stimulus package that would provide direct cash assistance to state budgets, which could change how Pennsylvania chooses to spend the round of current cash.

Those unknowns could make it beneficial for state officials to take their time allocating the money, but some Democratic lawmakers are fussing to move faster. That includes Sen. Vincent Hughes (D., Phila.), who wants to use $550 million to small business grants.

“Money sat in the Pennsylvania account for six weeks,” he said in a statement. “The question is: why are we waiting?

The funding was provided through the CARES (Coronavirus Aid, Relief, and Economic Security) Act, a $2 trillion package hastily written by Congress with money for small businesses, workers recently unemployed and industries affected by the pandemic.

The act created a $150 billion coronavirus relief fund for states and localities “to address unforeseen financial needs and risks created by the COVID-19 public health emergency,” according to the U.S. Treasury. . Of that amount, $4.9 billion was for Pennsylvania, with $1 billion going directly to the seven largest counties in the state.

Gov. Tom Wolf has the power to decide how the remaining $3.9 billion is spent, but he has pledged to work with the legislature, and there has been some movement.

The State House and Senate are proposing separate versions of the legislation to harness the cash for the first time, largely to provide millions of dollars in relief to hard-hit nursing homes and other long-term care facilities in across the state.

On Wednesday, nearly 15,000 nursing home residents fell ill with the virus and more than 3,000 died. State officials have announced plans to increase testing at these nursing homes, but some facilities have backed down, saying they need more cash assistance.

The Senate bill would earmark $538 million for frontline industries and workers, with the bulk — $507 million — going to long-term care facilities through the Department of Human Services. Fire companies would also receive $26 million in funding and first responders would receive $4 million.

The measure only specifies that funds should be used for coronavirus-related expenses, although there is no language requiring the Department of Social Services or recipients to report how they were spent.

A House version, developed by Chairman Mike Turzai (R., Allegheny) in consultation with UPMC and health care experts in Pittsburgh, would spend $500 million to create regional health collaborations and entrust centers medical academics the responsibility of assisting long-term care. facilities.

Funding would be allocated to each facility based on their proposal, which would outline how supplies, staff, testing and protective equipment would be provided to nursing homes in need of assistance, with an emphasis on increased testing and infection control.

The Department of Social Services would be responsible for implementing the plan. Turzai’s bill includes an additional $767 million in CARES dollars for the department to distribute to long-term care facilities and other providers, bringing the total price to $1.3 billion.

Turzai said academic medical institutions are the only entities with the expertise to intervene.

“They should have consulted with these experts early on,” he said of the state. From now on, “the legislator must take the lead, and we are doing it”.

The only lawmaker to oppose the House bill, Rep. Pam DeLissio (D., Phila.), said on the floor last week that the legislation doesn’t provide enough accountability for how funds can be spent – ​​like capping how much can be used for administrative salaries.

“With this kind of large, meaningful and substantial resources, I would like to see those resources applied in the most effective way possible,” she said. “Unfortunately, I will be a ‘no’. And if anyone doubts my passion for this sector, they would be grossly mistaken.

Mike Straub, spokesman for House Republicans, said he disagreed that the bill is weak on accountability.

“The [Department of] Social services would collect proposals from the collaborations on how best to effectively support COVID-19 preparedness and response in facilities, improve quality of care, and expand testing for facility staff and residents. long-term care,” Straub said. “Employees are also required to perform daily facility reviews.”

In one report last weekthe U.S. Department of the Interior has warned that “accurate and timely review of performance and financial reports” will be key to keeping CARES Act money in check.

“Awards made as part of an emergency response are riskier than normal because they are awarded quickly and often without competition, and have a higher purchase threshold than other acquisitions,” officials wrote. the agency.

Lyndsay Kensinger, spokeswoman for Wolf, said the governor supports the Senate bill in its current form, but not the House legislation.

What Wolf and the legislature will do with the other discretionary funds remains to be seen. The General Assembly is expected to adopt a short-term budget this week that will fund the government and its services for the next five months. House Republicans say it will buy time to get a clearer picture of the strain on Pennsylvania’s finances from the state’s efforts to slow the spread of COVID-19.

It could also buy time for more clarity on how the stimulus money can be spent and what more could come from the federal government.

Right now, the u.s. treasury says none of the discretionary CARES dollars can replace state or local tax revenue that has been lost due to the pandemic, although the funds can be used to pay workers who are “essentially dedicated” to the coronavirus response.

Some federal legislators, including members of the Pennsylvania Republican delegation, are to push to allow money to be spent on lost revenue.

Meanwhile, state Senate Democrats have stepped up pressure to start spending the discretionary dollars. Previously, the caucus had published a list priorities for the CARES Act funding appropriation, with most of the money going towards housing assistance, student debt relief, aid for veterans and schools.

In addition to discretionary funds, state agencies also received $2.5 billion in earmarked federal dollars, according to a breakdown provided by the Wolf administration.

The Department of Health, the agency at the center of the state’s response, received $72.8 million for several purposes, including epidemiology and laboratory surveillance and response. The Department of Education received $523.8 million to relieve schools, while the State Department received $14 million to cushion costs related to the 2020 election.

So far, $653.6 million has been appropriated or committed by state agencies or offices.

In total, the federal government injected $78 billion into the state’s economy in response to the coronavirus pandemic, according to a report by the Independent Fiscal Office. That number includes forgivable loans given to small businesses through the Paycheck Protection Program and $1,200 stimulus checks sent directly to residents.

Rebecca Moss of Spotlight PA contributed to this article.

100% ESSENTIAL: PA projector based on funding from foundations and readers like you who are committed to responsible journalism that produces results. If you enjoy these reports, please make a gift today to

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Global debt on the rise, Africa hardest hit | News | DW

The “Debt Report 2019”, presented on Wednesday in Berlin by Jubilee Germany, paints a bleak picture of global debt. The organization, which is made up of civic and religious groups, is engaged in efforts to end the problem.

The report argues that low interest rates and cheap credit are pushing poorer countries to borrow beyond their means, trapping them in a debt trap from which they can never escape.

Read more: Global Wealth Report: The Rich Are Getting Richer Again

Of the 154 countries analyzed by Jubilee, 122 are seriously indebted, three more than in 2017.

The organization called for debt moratoriums and even debt relief for the most indebted countries, as well as an international bankruptcy plan. In addition, he calls for a public register listing the debt of each country, its creditors and the cost of servicing this debt.

Speaking in Berlin, Klaus Schilder of the Catholic aid organization Misereor said “the situation is really dire”.

The tragic example of Mozambique

Schilder used Mozambique as an example of what can happen to debt-burdened countries in the event of a disaster. Mozambique was hit by a cyclone following rising waters in mid-March, but due to its dire financial situation, it does not have sufficient funds to help the 1.85 million people affected by the devastation.

Asian countries such as Mongolia and Bhutan and some Middle Eastern countries such as Bahrain and Lebanon are heavily indebted, but the report says Africa is the continent hardest hit by the crisis.

Almost all African countries are heavily indebted, with the report classifying the situation in several countries as critical or very critical.

Angola, Gambia, Eritrea, Sao Tome and Principe, Somalia, South Sudan and Sudan are in such dire straits that they have simply stopped paying their debts.

Although corruption is one of the causes of indebtedness, the report points directly to predatory lending practices.

Read more: Africa’s debt crises are not the fault of creditors alone

“China is not the bad guy”

Although China often gets a bad rap for creating debt traps when funding infrastructure projects, Jubilee has come to Beijing’s defense.

From 2000 to 2017, China extended some 143 billion euros ($161 billion) in credit to African nations and businesses, but Jubilee’s Jürgen Kaiser said, “China is not the bad guy.” He also noted that China had canceled large debts in the past.

The report made it clear that the much larger problem of predatory lending was posed by institutions such as the World Bank or European development funds.

“Initiatives like the ‘Compact with Africa’, created while Germany held the G-20 presidency, can also pose a very high debt risk depending on the funding model used,” according to Klaus Schilder of Misereor.

The German government is currently planning a new €1 billion African investment fund.

Ultimately, Schilder said, it is citizens who suffer when countries run into debt: “When a large portion of a country’s budget is spent servicing debt, it becomes impossible for governments to govern. – and they cannot allocate sufficient funds to sectors like health and education.”

Daniel Pelz contributed to this story.

Every evening at 6:30 p.m. UTC, DW’s editors send out a selection of the day’s news and quality journalism. You can sign up to receive it directly here.

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Argentina announces debt restructuring agreement with its creditors

BUENOS AIRES, Argentina (AP) — Argentina said on Tuesday it had reached an agreement with its major creditors to restructure $65 billion in foreign debt, offering some relief to a country dogged by recession long before the pandemic hit. .

The agreement will allow creditor groups “to support Argentina’s debt restructuring proposal and grant Argentina significant debt relief,” the economy ministry said in a statement. He said certain payment dates would change without increasing the total amount of principal and interest payable “while enhancing the value of the proposal to the creditor community,” according to the statement.

The reported deal follows seven months of talks and shifting timelines, and coincided with another long period of economic misery in Argentina, where unemployment and inflation have been stubbornly high and the peso has been falling for decades. years. The pandemic made matters worse, as Argentina imposed a lockdown that helped curb the spread of the novel coronavirus but crippled large sectors of the economy.

“We solved an impossible debt during the worst economic crisis in living memory and in the midst of a pandemic,” said President Alberto Fernández.

Argentina has also been involved in talks with the International Monetary Fund over the restructuring of $44 billion in debt owed to the lender. The deal Argentina announced on Tuesday was seen by analysts as a welcome step forward that could pave the way for progress with the IMF, even though Argentina’s economic fortunes look fragile in the long term.

Kristalina Georgieva, managing director of the IMF, praised Argentinian officials for reaching an agreement “in principle” on the national debt.

“A very important step. Let’s expect a successful conclusion for the benefit of all,” she said on Twitter.

“Today’s sovereign debt restructuring agreement between the Argentine government and private creditors allays fears of another debilitating legal waste, similar to what followed the country’s default in 2001,” he said. said Capital Economics in an analysis.

“However, we doubt that the agreement will be sufficient to ensure the sustainability of Argentina’s public debt in the medium and long term,” the London-based consultancy said.

Fernández won elections last year, capitalizing on discontent over former leader Mauricio Macri’s handling of the economy. Macri was determined to impose fiscal discipline and revive the fickle economy, but conditions deteriorated further and he ended up turning to the IMF for a record financing deal.

Opponents had linked Fernández to the left-wing populism past of his vice president and former president, Cristina Fernández de Kirchner (the two are unrelated), although her tenure has so far been dominated by efforts to avoid a default. and reach an agreement with creditors.

The agreement with the groups of creditors that was announced on Tuesday changes the payment dates for the new bonds to January 9 and July 9, 2021, instead of March 4 and September 4 of the same year as previously proposed, according to the ministry of l ‘Economy. These bonds “will begin to amortize in January 2025 and mature in July 2029,” its statement said.

Argentina will also modify certain legal clauses in the new bond documentation to respond to proposals from creditors “which aim to strengthen the effectiveness of the contractual framework as a basis for the resolution of sovereign debt restructurings”, the ministry said.

Creditors have until August 24 to formally accept the deal, the ministry said, extending the deadline from its previous expiration date on Tuesday.

A Citi analysis noted that creditor groups had yet to issue a statement backing Argentina’s changed terms, but said the latest economic terms from both parties appeared close. He noted that Argentine bonds soared on news of the deal.

“With this uncertainty removed and potential engagement with the IMF, we believe further upside is likely in the coming weeks,” Citi said. He added that local assets are likely to “temporarily benefit” from the announcement.


Torchia reported in Mexico.

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Why Student Debt Will Continue to Rise Despite Loan Forgiveness Programs Proposed by Lawmakers in Congress

A graduate student wears a silver lei, a necklace made of US dollar bills, during Pasadena City College’s graduation ceremony on June 14, 2019, in Pasadena, California. ROBYN BECK/AFP via Getty Images

  • US lawmakers are debating student debt relief proposals, seeking help for people struggling with loans.

  • But the proposals on the table right now aren’t a one-size-fits-all solution, experts say.

  • The problem is a cycle of student loan accumulation and little education about how that debt works.

  • Visit Insider’s Business section for more stories.

It’s a familiar sight every year: a sea of ​​future college graduates, seated in their caps and gowns, with families and friends watching proudly as they parade, one by one, onto the stage to receive their awards. hard earned. degrees.

But for many of the 35 million student borrowers in the United States, the celebration is short-lived. Months after college, their debts become due and payable, and for some this will be a heavy burden.

Since taking office, President Joe Biden has come under immense pressure to aggressively tackle the student loan crisis.

Democratic Sens. Elizabeth Warren and Chuck Schumer announced in February a plan to eliminate up to $50,000 in student loans per borrower. But Biden rejected him.

“I’m not going to make that happen,” he said. “I’m ready to write off $10,000 in debt, but not $50,” he said. “I don’t think I have the power to do that.”

Student debt relief is supported by all parties. According to a national survey conducted by the Harris Poll in December, 55% of Americans are in favor of the total cancellation of student loans. And about 64% of respondents said they were in favor of writing off a fixed amount, like $10,000.

Education debt has been rising steadily for about a decade, experts told Insider. It also held people back.

“Students who graduate with debt may postpone important life milestones such as buying a car, owning a home, getting married, or entering certain low-paying professions like teaching. or social work”, a 2006 report of the American Association of State Colleges and Universities says.

The problem persists and only escalated during the COVID-19 pandemic, which has shuttered businesses across the United States and eliminated millions of jobs over the past year.

“Former students have been unable to get out of debt,” said Andrew Pentis, Certified Student Loan Counselor at Student Loan Hero by LendingTree. “So it grows with interest, sometimes multiplying over the years, even decades.”

Bad education on the dangers of debt

Too often, first-generation American families who review college and university financial aid programs fail to realize that the loans they see offered must be repaid with interest.

Other times, families view student loans as “good debt.” They see it as “the price of investing in one’s future, sometimes graduating from a prestigious but more expensive school in order to move up the social ladder,” Pentis said.

The government also doesn’t do enough to explain its federal student loan options. “A large cohort of borrowers leave school without fully understanding their debt burden or their options for paying it off,” Pentis said. “The government needs to take a more direct role in educating students on how to avoid federal student loans, not just offering them without explanation.”

High schools also tend to gloss over the subject, he said.

“The family who are determined to pay six figures to send their child to the prestigious university,” he said, “may not have considered spending two years at a community college before moving on to this best four-year school could reduce his costs and borrowing significantly.”

Student debt is rising because college education is an industry in the United States, experts tell Insider.

“Higher education operates like a free market,” said Chris Mullin, strategic director of data and measurement at the Lumina Foundation, an organization committed to expanding access to higher education.

“As a result,” Mullins said, “the cost a student pays can be set at what the market will bear.”


Peter Cade/Getty Images

The cost of schooling depends on several factors

College tuition fees are not federally regulated, and there are distinctions between how private and public universities set them, which directly affects how much students and their families will pay. Private university tuition fees are decided by the institutions themselves, student debt experts told Insider.

“Private schools obviously have more leeway when it comes to setting tuition and fees,” Pentis said.

This is one of the reasons why private institutions like New York University set much higher “sticker prices” on their tuition than public colleges. The price displayed is the cost of tuition a student can expect to pay before grants, loans, and other types of financial aid kick in, which means not everyone not pay the full amount or the same amount for higher education.

And because private institutions have more say in setting tuition fees, the underlying decision-making process varies from institution to institution. This can cause differences between the listed price and the net tuition price, with the net price being what a student ultimately pays for their education after financial aid is applied.

Donna Desrochers, senior researcher for the American Research Institutes Education Program, says higher-cost private universities may simply set these prices in an effort to subsidize tuition for students receiving financial aid.

“It is possible that [for] NYU, or any other school, the higher price takes some of those full-salary dollars from full-salary students and tries to reallocate them to provide aid to other students,” Desrochers said.

Meanwhile, public university tuition, which is generally more affordable, is set by the states.

“Maybe they have a lower sticker price, and maybe they don’t reallocate as much aid to students,” Desrochers said.

Thumbnail prices are a type of ‘complex marketing’, says Desrochers

“It’s kind of like an airline, isn’t it? And people compare it to that, sometimes. You pay different prices for different seats, depending on when you bought it. And so, it’s pretty similar,” she said. “They try to attract the class they want.”

Sticker prices also help institutions maintain operating costs, Desrochers said. Public colleges benefit from rising sticker prices, especially when states contribute less money to higher education budgets.

“It pays less for the establishment,” Desrochers explained. “It actually ends up shifting those costs onto the students.” Due to the recession caused by the coronavirus, Desrochers expects states to invest less in higher education, which will cause institutions to pass these costs on to students instead of trying to minimize their expenses.

“We see it every time after a recession,” she said.

A good portion of students do not pay the full sticker price for tuition. According to a National Association of College and University Business Officers studytuition fees were reduced by an average of 46.3% for all undergraduate students from 2018 to 2019.

This means that, overall, the institutions are “making substantial grants,” said Mullin, director of strategy for the Lumina Foundation.

Student debt relief measures are still needed

Collectively, student borrowers in the United States owe more than $1.7 trillion. Billion with a T. So the conversations about how to deal with this debt will continue.

They will go a long way to helping borrowers “who don’t have much luck ending their debt on their own,” Pentis said.

But no relief measures will tackle the source of the problem: the newest student loans.

Unless students and their family members recognize the dangers of racking up large amounts of debt at high interest rates, the upward trend in student debt will continue, experts warn.

Although tuition is not a federal decision, the government has two levers to pull to encourage colleges to change tuition rates, Mullin said.

The government can change the amount of money it makes available to a single student or change who is eligible for financial aid. This way, students will have fewer restrictions like part-time or full-time status to receive federal aid. Schools could then give greater aid to students, Mullin said.

Additionally, the government may “provide consumer information” for the purpose of disclosing data and providing benchmarks to help students make informed decisions about their college education.

“He can inform the public by effectively placing a warning on institutions, like the United States Surgeon General’s warning on a cigarette pack,” Mullin said.

“This type of ‘warning’ can take the form of a requirement, for example, that institutions make public the results of their programs in the labor market,” he said, effectively showing students the type return on investment they can expect after graduating from college.

Read the original article at Business Intern

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AFCC Debt Settlement Market Segmentation, Analysis by Recent Trends, Development and Growth by Regions to 2025

the AFCC Debt Settlement Market The research report offers a holistic view of key trends and aspects positively and negatively impacting the growth of this vertical, to help stakeholders make informed decisions. Also, it provides figures related to the future growth of this field by comparing the past and current business scenario. Additionally, the document contains a description of the shares and size of the market and its segments, while exploring the lucrative prospects that promise success in the coming years.

According to analysts, the AFCC debt settlement market is expected to gain momentum during the period 2020-2025, registering a CAGR of XX throughout.

Impact of Covid-19

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The Covid-19 epidemic in December 2019, which took over the whole world in 2020, left several economies in a dire state. With the WHO issuing a public health emergency and more than 40 countries declaring states of emergency, industries including the AFCC debt settlement market face a plethora of challenges. Travel bans and quarantines, cessation of indoor/outdoor activities, temporary halt in business operations, fluctuations in supply and demand, stock market volatility, decline in business insurance and many uncertainties have a negative impact on business dynamics.

Additionally, the Business Intelligence report highlights the implications of COVID-19 on the industry, elaborating on the challenges faced by businesses such as supply and demand flows, management costs and digitization of operations. In this context, he offers solutions that will guarantee profits in the years to come.

  • COVID-19 footprint on industry compensation.
  • Estimated growth rate of the market and submarkets.
  • Main market trends.
  • Opportunities for growth.
  • Positives and negatives of indirect and direct sales channels.
  • Main dealers, traders and suppliers.

AFCC Debt Settlement Market Segments Covered in the Report:

Regional bifurcation:

  • North America (United States, Canada and Mexico)
  • Europe (Germany, France, UK, Russia, Italy and Rest of Europe)
  • Asia-Pacific (China, Japan, Korea, India, Southeast Asia and Australia)
  • South America (Brazil, Argentina, Colombia and rest of South America)
  • Middle East and Africa (Saudi Arabia, United Arab Emirates, Egypt, South Africa and Rest of Middle East and Africa)
  • Inspection of each regional market at the national level.
  • Total income of each area.
  • Market share captured by each geography.
  • Estimates of the growth rate of each regional market over the forecast period.

Type of product : Credit card debt, student loan debt, medical bill, apartment leases and more

  • Market share held, revenue and sales of each product type.
  • Price model of each product category.

Application spectrum: Business and Personal

  • Overall revenue and sales generated by each type of application.
  • Product pricing based on application spectrum.

Competitive Dashboard: National Debt Relief, Guardian Debt Relief, Freedom Debt Relief, Rescue One Financial, CuraDebt Systems, ClearOne Advantage, America Debt Solutions, Accredited Debt Relief, Pacific Debt, America Debt Resolutions, Consumer Debt Help Association, Americor Financial , Consumer First Financial, Century Helpline, Atlas Debt Relief, CreditAssociates and Beyond Finance

  • Products and services offered by the main players in the industry.
  • Manufacturing facilities of major competitors in areas served.
  • Summative revenue, price patterns, market share, gross margins and total sales of listed companies.
  • SWOT analysis of top players.
  • New and emerging players in the industry.
  • Detailed information about popular trading strategies, market concentration rate and marketability rate.

Key indicators analyzed

  • Global and regional market analysis: The report details the current global and regional market status and outlook for 2020-2025. It does this through a top-down assessment of the trade landscape in each region and country with respect to consumption, production, import and export, sales volume, and revenue forecast.
  • Product Type Analysis: The report hosts a granular assessment of the majority of product types in the AFCC Debt Settlement market, including product specifications by each key player, volume, as well as sales in terms of volume and value (Mn USD).
  • Application type analysis: Major application segments are covered along with their respective market size, CAGR, and forecast.
  • Market Players and Competitor Analysis: Major players are examined based on their business profiles, specifications, production/sales capacity, price, revenue, sales and gross margin over the period 2015-2025 by product types .
  • Market trends: Key industry trends, including continued innovations and increasing competition, are comprehensively reviewed.
  • Drivers and opportunities: Identification of growing demands and new technologies.
  • Porter’s Five Forces Analysis: The level of competition is assessed on the basis of five fundamental forces: the threat of substitute products or services, the bargaining power of suppliers, the bargaining power of buyers, the threats of new entrants and the existing rivalry in the industry. .

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Developing countries need debt relief in virus fight, says WHO | Coronavirus pandemic

The World Health Organization says it supports debt relief for developing countries with the IMF and World Bank.

The head of the World Health Organization (WHO) has expressed deep concern over the rapid escalation and global spread of COVID-19 cases of the novel coronavirus, which has now reached 205 countries and territories.

WHO Director-General Tedros Adhanom Ghebreyesus said on Wednesday his agency, the World Bank and the International Monetary Fund (IMF) supported debt relief to help developing countries cope with the social and economics of the pandemic.

Tedros hailed India’s $22.6 billion economic stimulus package – announced after a 21-day lockdown imposed last week – to provide free food rations to 800 million poor people, cash transfers to 204 million poor women and free cooking gas to 80 million households for the next three months.

“Many developing countries will struggle to implement social protection programs of this nature,” Tedros said during a virtual press conference at the organization’s headquarters in Geneva.

“For these countries, debt relief is essential to enable them to take care of their people and avoid economic collapse. This is a call from the WHO, the World Bank and the IMF – debt relief for developing countries,” he said.

Corn debt-relief the processes are long, Tedros said.

“Over the past five weeks there has been near exponential growth in the number of new cases and the number of deaths has more than doubled in the past week,” he said.

“In the next few days, we will reach one million confirmed cases and 50,000 deaths worldwide,” he added.

China, where the coronavirus outbreak first emerged in December, reported a decline in new infections on Wednesday and revealed the number of asymptomatic cases for the first time, which could complicate reading trends in the epidemic.

Asked about the distinction, Dr Maria ver Kerkhove, a WHO epidemiologist who was part of an international team that visited China in February, said the WHO definition includes laboratory-confirmed cases” regardless of the development of symptoms.

“From the data that we’ve seen from China in particular, we know that individuals who are identified, who are listed as asymptomatic, about 75% of them actually develop symptoms,” he said. she said, describing them as having been in a “pre-symptomatic phase.” The novel coronavirus causes the respiratory disease COVID-19.

The outbreak continues to be driven by people showing signs of illness, including fever and cough, but it is important that the WHO captures this “full spectrum of illness”, she said. added.

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Debt relief improves psychological and cognitive functions, enabling better decision-making

While many poor people are burdened with debt, helping them financially is controversial because their debts are often thought to be the result of bad habits.

A new study from the Center for Social Services Research (SSR) at the National University of Singapore (NUS) demonstrates that reducing the number of debt accounts reduces the mental burden of the poor, thereby improving psychological and cognitive performance. This allows for better decision making. Therefore, poverty interventions must be structured to improve psychological and cognitive functioning in addition to meeting the financial needs of the poor.

The study was co-authored by researchers from NUS and the Singapore University of Social Sciences (SUSS). A field study was conducted between January 2015 and August 2017 by Dr Ong Qiyan and Associate Professor Irene Ng from the Faculty of Arts and Social Sciences at NUS, in collaboration with Associate Professor Walter Theseira from SUSS School of Business. The research results have been published in the journal Proceedings of the National Academy of Sciences.

Ease the debt burden of low-income people

Dr Ong explained: “One of the challenges of poverty reduction policies is the fundamental belief that the poor are indebted because of their personal failures. According to this view, those trapped in poverty are believed to lack desirable qualities such as motivation and talent that most people in Singapore possess and value. However, our study shows that because debt impairs psychological functioning and decision-making, it would be extremely difficult for even motivated and talented people to escape poverty. Instead, the poor must either have exceptional qualities or be exceptionally lucky to rise out of poverty. It’s hard to be poor, harder than we thought.

The study looked at 196 chronically indebted low-income people who benefited from the Getting Out of Debt (GOOD) program run by the Singapore-based charity Methodist Welfare Services. It is a one-time debt relief program for households with a monthly per capita income of less than S$1,500 and who had chronically outstanding debt for at least six months. These debts included mortgage or rental, utilities, municipal taxes, telecommunications bills and hire purchase debts. Prior to debt relief, the average per capita monthly household income of participants was S$364.

The research team designed a comprehensive household financial survey that measures participants’ anxiety and cognitive functioning as well as financial decision-making. The survey was conducted before participants received debt relief and three months after debt relief.

Positive effects of debt relief

The study, which is the first of its kind, found that participants experienced less anxiety and improved cognitive functioning, and were able to make better financial decisions three months after receiving debt relief. Between two participants receiving the same amount of debt relief, the participant with more debt accounts eliminated showed more psychological and cognitive improvements.

These results confirm that chronic indebtedness impairs psychological functioning and decision-making. The findings also imply that people view each debt as a separate “mental account” and being “in the red” in many debt accounts is psychologically painful. Thus, thinking about these stories consumes mental resources, increases anxiety and deteriorates cognitive performance. This psychological impact can prevent the poor from making the right decisions to get out of poverty, further contributing to the poverty trap.

Professor Assoc Theseira pointed out that there are differences in the way the poor and the non-poor manage their debts and that the poor need more help. He said: “Although our study is based on the poor, many non-poor Singaporeans also have debt. Why are some people able to easily manage their debts, while others find them stressful and taxing? difference is that the non-poor have the financial resources to manage their debts conveniently and cheaply. We do not hesitate to consolidate our bills on a credit card and pay them automatically. We know that we have enough savings to be able to afford an unexpected expense or the occasional splurge. So we have a lot of resilience to the vagaries of life that the poor simply do not have. Therefore, we should not assume that just because we find that It’s easy to manage debt, we could do the same if we were poor Our mental debt accounting costs are simply lower than debt. you are poor.”

Actionable evidence to reduce poverty

Professor Assoc Ng concluded: “The results of this study open a pragmatic case for designing good debt relief programs for low-income households. First, they help. In fact, not helping households to low-income indebtedness is counterproductive because not doing so leaves them with suboptimal functioning and high anxiety.Secondly, the design of the intervention is critical.As it is the accumulation of debt accounts (more than the amount of debt) that affects functioning, interventions should focus on decreasing the mental burden on low-income households, whose minds are already highly stressed.”

Researchers suggest that policy interventions that rationalize debt would significantly improve cognitive and psychological functioning and reduce counterproductive behaviors. For example, debt restructuring or consolidation could be a more sustainable policy because it is less costly and more effective than simple debt clearance. More generally, poverty reduction interventions should target and reduce the factors that contribute to the mental burdens of the poor.

Researchers are now examining the longer-term effects of debt relief and applying the study’s findings to find innovative solutions that can help the poor.

This research project exemplifies what the NUS SSR aims to achieve – policy-relevant research that collaborates with the social service community to find solutions to Singapore’s social needs. The research team thanks Methodist Welfare Services and participating agencies for their contribution to this important study.

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G20 to discuss post-pandemic world and support debt relief

Leaders of the world’s 20 largest economies (G20) will debate this weekend how to deal with the unprecedented COVID-19 pandemic that has caused a global recession and how to handle the recovery once the coronavirus is under control. control.

Top of the list is the procurement and global distribution of vaccines, drugs and tests for low-income countries that cannot afford such expenses themselves. The European Union will ask the G20 on Saturday to invest $4.5 billion to help.

“The main theme will be to intensify global cooperation to deal with the pandemic,” said a senior G20 official taking part in preparations for the two-day summit, chaired by Saudi Arabia and held virtually due to the pandemic.

To prepare for the future, the EU will propose a treaty on pandemics.

“An international treaty would help us react faster and in a more coordinated way,” EU leaders Chairman Charles Michel told the G20 on Sunday.

As the global economy recovers from the depths of the crisis earlier this year, momentum is slowing in countries where infection rates are resurfacing, the recovery is uneven and the pandemic is likely to leave deep scars, said the International Monetary Fund in a report for the G20 Summit.

Poor and heavily indebted countries in the developing world, which are “on the brink of financial ruin and escalating poverty, hunger and untold suffering”, are particularly vulnerable, the UN Secretary General said on Friday. United, Antonio Guterres.

To address this, the G20 will approve a plan to extend the moratorium on debt servicing for developing countries by six months until mid-2021, with the possibility of a further extension, according to a draft communiqué from the G20 seen by Reuters.

European members of the G20 are likely to push for more.

“Additional debt relief is needed,” Michel told reporters on Friday.

Debt relief for Africa will be a major theme of Italy’s G20 Presidency in 2021.

Europe’s G20 nations will also seek to inject new momentum into the stalled reform of the World Trade Organization (WTO), hoping to capitalize on the upcoming change in the US administration. Outgoing President Donald Trump preferred bilateral trade agreements rather than going through international bodies.

The change in American leadership also gives hope for a more concerted effort at the G20 level to fight climate change.

Like the European Union, already half of the G20 members, including Japan, China, South Korea and South Africa, plan to become climate or at least carbon neutral by 2050. or soon after.

Under Trump, the United States withdrew from the Paris Agreement to fight climate change, but the decision is expected to be reversed by President-elect Joe Biden.

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In new lawsuit, borrowers accuse Navient of obstructing student debt forgiveness

Potentially millions of teachers, social workers and other public servants wasted money repaying loans because a major student loan company blocked access to debt forgiveness to which they were entitled, according to a new lawsuit.

The class action filed Wednesday against Navient by borrowers eligible for civil service loan cancellation, says the company provided these civil servants with incorrect information, extending the time they would need to wait before their loans were canceled in under the program and causing them to spend money unnecessarily on their debt.

The borrowers also allege that Navient’s corporate policies encouraged this behavior. The lawsuit, funded by the American Federation of Teachers, says Navient encourages its employees to spend a few minutes on the phone with borrowers, but advising borrowers of their options can take significantly longer.

The lawsuit also alleges that Navient had reasons to make it harder for borrowers to qualify for the PSLF — once a borrower is deemed eligible for the program, their loan is transferred to another company — and that Navient wanted to ensure that he continued to receive the money. associated with the account.

Navient “deliberately and systematically trapped teachers, nurses and other public service workers under a mountain of student loan debt rather than offering them the opportunity to reduce that debt through the public service loan forgiveness program. public,” said Randi Weingarten, chairman of the AFT. during a conference call with reporters.

A representative for Navient declined to comment on the allegations.

The public loan cancellation program got off to a rocky start

The lawsuit is the latest indication of the challenges borrowers face in accessing the PSLF. So far around 28,000 borrowers have applied for the release of their loans and only 96 have been approved.

The program, which was enacted in 2007, allows civil servants to have their loans canceled after 10 years of payments. But it appears that at least thousands of borrowers have been fooled by the eligibility criteria, which require borrowers to have the right kind of federal student loan, work in the right kind of job (the government at all levels and only certain nonprofits), are in the correct repayment program and make 120 qualifying payments.

Moreover, this lawsuit is just one of many allegations by borrower advocates that student loan servicers have put roadblocks in the way of officials’ forgiveness.

Seth Frotman, the student loans ombudsman at the Consumer Financial Protection Bureau until August, told reporters on the call that during his work at the office he had met countless borrowers hoping to qualify for the PSLF, whose dreams had been dashed by “inexcusable service failures”. and “the lies told to them by their loan officer”.

“I didn’t need any help – I needed a little advice”

Kathryn Hyland, a New York-based public school teacher, said in the lawsuit that she believed she was on track to get loan forgiveness for three years, thanks to information she received from Navient. She later learned that the payments she made during that time did not count for cancellation because she had the wrong type of federal loan — a problem she could have solved had she known.

Melissa Garcia, another New York-based public school teacher, claims in the lawsuit that she was misled by Navient on multiple occasions. At one point, the company advised him to consolidate his student loans, which restarted the clock towards debt cancellation and caused him to lose 37 payments that would have counted towards that goal. Additionally, she alleges that Navient advised her to participate in a repayment program that was not eligible for PSLF, despite her appeal to ask her to stay on track for a pardon.

Megan Nocerino, a college teacher from Florida, told reporters on the call that she reached out to Navient to help her manage her debt while she cared for her sick son and was oriented. towards forbearance – a status that temporarily halts payments and progresses towards forgiveness and during which interest continues to grow. This happened even though she was eligible for PSLF and there are repayment plans available that would maintain her eligibility and make her monthly payments more manageable.

“At that time, I just needed a little help – I didn’t need help – I needed a little guidance and a little understanding,” he said. she said on the call.

A symptom of a larger problem

The types of challenges officials face in accessing the PSLF provide a window into broader systemic issues with the student loan program that may become more pronounced as more borrowers become eligible for other relief programs. less tight debt, said Persis Yu, the director of the Student Loan Borrower Assistance Project at the National Consumer Law Center.

“The utility loan portfolio is kind of like the canary in the coal mine,” Yu said. Many of these borrowers may have advanced degrees and maybe even received counseling from their schools or their employers about accessing the program and yet they still struggle. This indicates that as borrowers with perhaps fewer resources become eligible for debt relief, they also may not receive it when they qualify, Yu said.

“The fundamental confusion about the student loan program runs much deeper than someone hasn’t read the fine print,” she said. “To access many programs under the federal loan program, all you have to do is harass your servicer.”

Although advocates have complained under the Obama administration that services aren’t doing enough to help borrowers, Weingarten told reporters on the call that the Betsy DeVos-led Department of Education is only doing worsen the situation.

During DeVos’s tenure, the Department worked to protect student loan companies from state consumer protection laws. In addition, the agency tried to block the implementation of Obama-era rules aimed at protecting predatory college borrowers and trying to make them whole when they are misled by their schools.

“In every angle they operate from, they are effectively a friend to lenders and an enemy to borrowers,” Weingarten said.

The Department of Education did not immediately respond to a request for comment.

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$5.4 Million Awarded by FTC to People Who Paid for ‘Worthless Student Loan Debt Relief’

The Federal Trade Commission is sending more than $5.4 million to nearly 40,000 people who lost money to a student debt relief scam. The defendants behind the scam had to hand over the money as part of a 2018 settlement with the FTC.

Defendants’ Los Angeles-based companies used the following names: Alliance Document Preparation, LLC; EZ Doc Preps; Help for graduates; Help with the first document; SBS Capital Group, LLC; Release of United Graduates; CFF Holdings, LLC; preparation of allied documents; Postgraduate services; United Legal Center, LLC; Post-graduation aid; Help for graduates; United Legal Disclaimer; United Legal Center, Inc.; Grads Doc Prep, LLC; Academic Help Center; academic protection; Doc Prep Academy; and academic release.

The FTC alleged that the defendants’ companies defrauded millions of people trying to reduce or eliminate their student loan debt. The defendants marketed on social media platforms, including Facebook. According to The FTC Complaint, they falsely stated that they were affiliated with the United States Department of Education or loan officers, and falsely claimed that consumers who paid upfront fees of up to $1,000 were qualified or approved for monthly payments permanently reduced or loan forgiveness. In fact, according to the complaint, the defendants had no affiliation with the US Department of Education and operated a service that offered no relief.

Like part of the settlement, the FTC sends 39,734 checks, averaging $136.48, to people who lost money. Checks will expire after 60 days as indicated on the check. The FTC urges people to cash them in before they expire. The FTC never requires consumers to pay money or provide account information to cash a refund check.

Consumers with questions about refunds should contact the refund administrator, Analytics, at 1-877-270-9672.

Consumers who wish to avoid falling victim to such fraud can visit to learn more. Consumers may also apply for loan deferral, forbearance, repayment, and forgiveness or discharge programs directly from the US Department of Education or their loan officers, free of charge; these programs do not require the assistance of a third-party company or the payment of an application fee. For federal student loan repayment options, visit For private loans, contact the loan manager directly.

The Federal Trade Commission works to promote competition and protect and educate consumers.


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A lifeline for consumers burdened with high-interest debt

“After serving more than 12 million visitors looking for help resolving their debts, we launched Project Debt Box as a secret weapon to help families better manage their credit and reduce their debts,” said Ellis Houck, editor of “These tools were designed to educate and motivate consumers to tackle debt with confidence,” Houck added.

Twelve user-friendly debt assistance tools available upon request

Project Debt Box offers twelve specific tools to help individuals and families budget, manage debt, protect their rights with creditors, and get out of debt. “It even provides valuable debt relief tips that anyone can use on their own – to lower interest rates, reduce payments and resolve debt more cheaply through structured debt programs. debt relief for struggling families,” Houck continued.

“Life Happens” and the Stats Tell the Story

Having served over 12 million people in debt, feedback from visitors to the Debt Relief Center makes it clear that while overspending can lead to unmanageable debt, it is often “life events” that trigger over-indebtedness. “In the past 90 days, of those who have contacted than 37% reported job loss or reduced income, while more than 20% said the debt was due to personal, family or medical difficulties,” Houck added.

When debt becomes too much to handle on your own

Clearly, regardless of life situations or events that trigger debt, Project Debt Box is an idea whose time has come. “It’s actually empowering for people when they finally say ‘enough’ and summon the courage to ask for help, kill the monster and put the worries of debt behind them,” Houck said.

For more information about Project Debt Box and how consumers can get help with overwhelming debt, go to

MEDIA CONTACT: For press inquiries, Walter Burch(818) 208-1492

SOURCE Debt Relief Center

Related links

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IMF right to maintain Covid support, but on debt relief it’s crumbs | Larry Elliot

go there and spend. Don’t worry about accumulating debt. You will make a mistake if you remove support from your savings too soon. This is the message of Kristalina Georgievathe managing director of the International Monetary Fund, to finance ministers as they consider how to deal with the economic damage caused by Covid-19.

Well, some of them at least. Finance ministers such as Rishi Sunak definitely get the green light to spend more. This is sound advice and should be heeded, not least because rock-bottom interest rates mean debt servicing costs go down even as borrowing goes up.

The IMF is taking a tougher line on countries that might ask for emergency bailouts. The government of Argentina, for example, will find that any aid it receives will come with strings attached that are sure to be painful and unpopular.

Finally, there are the poorest countries in the world, those which lack the capacity to provide unlimited stimulus to their economies and which, in many cases, are struggling with unpayable levels of debt.

Georgieva and the President of the World Bank, David Malpassboth know that a comprehensive debt relief program is needed for these countries, a program that involves all bilateral creditors and both the private and public sectors.

Unfortunately, that won’t happen at this year’s IMF annual meeting. All that is offered to the 70 or so poorest nations is a six-month extension of the G20 debt suspension plan agreed to in the spring. This does not represent the significant reduction that Malpass was talking about. It simply represents the brushing of a few crumbs from the rich man’s table.

Biden, not just coronavirus, could upend China’s recovery

For Xi Jinping, there will have been quiet satisfaction seeing the value of China’s stock market soar above the previous record high of $10.05bn (£8.06bn). Earlier this year, that other self-proclaimed strongman, Donald Trump, imagined a record run on Wall Street would propel him to a second term in the White House.

Now, unless he pulls off one of the most remarkable comebacks of all time, Trump is on his way to a big defeat at the hands of Joe Biden. A pandemic that started in China is going to be a deciding factor in determining the outcome of the US presidential election.

Stock prices have hit high levels in China before, and five years ago they came back to Earth with a bump. They could do it again if Covid-19 causes another deep fall in the global economy, stifling demand for Chinese exports.

But there are reasons why the Chinese stock market is rising high. Beijing has been content to use authoritarian measures to control the pandemic and recorded no cases in its latest daily report to the World Health Organization.

Control of the virus means the economy has recovered faster than expected. China’s growth rate, according to the IMF, will drop from 6.1% to 1.9% this year, but at least it remains positive, which is more than can be said for the United States , which are expected to contract by 4.3%.

Moreover, with Trump seemingly on his way out, investors believe the Cold War between Washington and Beijing will unfreeze. True, but probably not very much. Biden should be bad for the US stock market. It might not do much for China either.

£800million is the first – but won’t be the last – draw on the HS2 overrun fund

The least surprising title winner of the day goes to ‘Cost of HS2 high-speed rail line rises by £800m’. Apparently the cost of improving Euston station will cost at least £400m more than expected, while the discovery of more asbestos than expected will add another £400m to the bill.

Although there is a provident fund to cover overspending, it is only £5.3bn. And one thing is certain: £800m is the first draw on that reserve. It won’t be the last.

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Debt relief boosts Myanmar’s COVID-19 recovery

Author: Sean Turnell, Macquarie University

On July 1, 2020, the European Union and six of its member governments announced a moratorium on the repayment of debt owed by Myanmar. The deal allows Myanmar to “focus its efforts on post-COVID-19 economic recovery” and is worth nearly $100 million, or 20% of Myanmar’s current debt repayment schedule.

Widely relayed in the Burmese press, this gesture reinforces a relationship that has been strained over the past few years. atrocities in Rakhine State and elsewhere, and the possibility that EU trade privileges – vital to Myanmar’s rapidly growing garment sector – could be withdrawn.

The public health impact of COVID-19 in Myanmar has, in fact, been much milder than expected. Infection and death rates are low and more or less in line with the country’s peers in Southeast Asia. Despite early estimates that Myanmar could suffer 2 million deaths and 10 times as many people infected, as of mid-July the country had recorded only six deaths, 341 total confirmed cases and 278 recovered cases.

Given the state of Myanmar’s health administration, these figures almost certainly underestimate the true extent of cases. Yet such an undercount is not likely to be of a large magnitude. The author’s surveys of various hospital and health officials (and funeral associations) reveal that Myanmar really seems to have escaped the worst of the pandemic so far.

But while the health impact of COVID-19 on Myanmar has been relatively light, the same cannot be said for the economic damage. Exports, commodity prices, remittances and tourist arrivals were hit first, followed quickly by just about every other sector of the economy as the government implemented various strict containment measures (if necessary).

Once predicted as Asia’s second fastest growing economy with 6.7% GDP growth forecast in 2020, Myanmar’s economic growth will now fall to just 0.5%. Any comfort in the idea that this is still a positive number is tempered both by the high degree of uncertainty about these estimates and by the sheer magnitude of the growth reversal.

Non-farm employment takes a hit, with up to 5 million jobs lost. Many of these losses occurred in the formal economy, including a significant number in the critical garment sector. Surveys of small and medium-sized enterprises (SMEs) suggest that around half of them fear that their survival is at risk.

In the face of the economic damage of COVID-19, the government of Myanmar is acting with (perhaps surprising) speed and policy coherence. He enacted a series of relief measures centered on the US$2.2 billion “COVID-19 Economic Relief Plan” (CERP), the product of key economic reformers in the Ministry of Planning, Finance and of Industry and endorsed by the new Project Bank facility.

Monetary and financial initiatives will include interest rate cuts, debt rescheduling, new loan programs for SMEs and farmers, prudential bank forbearance and credit guarantees. The plan will also significantly increase health spending, food and cash transfers to the most vulnerable and village-based employment programs and accelerate various infrastructure projects.

One of the most innovative plans is to further boost Myanmar’s digital economy – which is already fueled by high mobile phone penetration rates – by bringing as many government services online as possible. Despite some implementation issues with CERP, it appears to have been effective in countering what might otherwise have been a near collapse in aggregate demand.

Financing these stimulus measures is difficult. The current government has been extraordinarily successful in cleaning up Myanmar’s public finances, which means that much of the spending is made possible simply by increasing budget allocations. Aided by surprisingly resilient bond and gilt markets, a modest reliance on central bank funding (while sticking to the government’s strict timetable to phase out such funding eventually) is also smoothing the way. .

In addition to European Union debt relief, other sources of international aid also play a role in financing Myanmar’s recovery. Under the Debt Service Suspension Initiative (DSSI) supported by the G20 and the Paris Club of creditor countries, Myanmar has received “additional” financial resources amounting to approximately $1.2 billion. dollars. Myanmar also accessed $357 million through the IMF’s Rapid Credit Facility – an amount representing 50% of the country’s IMF quota, leaving an additional $357 million still available for drawdown.

Interestingly – both for this moment and for the longer term relationship – China has offered little aid to Myanmar during COVID-19, though it has lobbied for approval of various Belt and Road Initiative projects. By far Myanmar’s largest creditor, China has so far been singularly insensitive to the needs of a country it so often presents as its “little brother”.

Sean Turnell is an Associate Professor in the Department of Economics at Macquarie University. He is also a Special Economic Consultant to the State Councilor of Myanmar and Research Director of the Myanmar Development Institute.

This article is part of a EAF Special Feature Series on the new coronavirus crisis and its impact.
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Global debt expected to reach nearly 100% in 2021 amid COVID-19 crisis, says International Monetary Fund (IMF)

Global public debt is expected to fall from 98% of GDP in 2020 to 100% of GDP in 2021

Global public debt is expected to hit 98% of GDP by the end of 2020, the International Monetary Fund (IMF) said in its latest fiscal monitor update on Thursday, saying public debt in India is expected to remain high at 83% percent. of GDP. The COVID-19 pandemic has posed a severe challenge to public finances, the report said, noting that the resulting contraction in output and lower incomes, as well as emergency lifelines, have pushed up deficits and public debts beyond the levels recorded during the global financial crisis.

Vitor Gaspar, director of the IMF’s fiscal affairs department, told reporters that government revenue had fallen everywhere, government debt had climbed to 98% from 84% before COVID-19. “From 2021, debt stabilizes at a high level and remains well above pre-COVID-19 levels until the end of the forecast horizon,” he said.

According to the Fiscal Monitor report, public debt is expected to remain high at 83% of GDP, underscoring the need for a credible medium-term fiscal framework to build confidence, anchored on revised fiscal targets and revenue mobilization.

Noting that global public debt is expected to increase further – from 98% of GDP in 2020 to almost 100% of GDP in 2021 – driven by advanced and emerging market economies, Paolo Mauro, Deputy Director of the Department of Public Finances of the IMF said with the pandemic still out of control and economies growing below potential, additional fiscal support will be needed in 2021, to protect livelihoods.

“High public debt need not raise immediate concerns about debt sustainability, but highly indebted emerging markets and developing economies may find it difficult to borrow more. market are good, but short-term debt vulnerabilities remain elevated in some developing countries,” he said in response to a question.

To cope with a sharp increase in public debt in developing countries, the international community – including the IMF – provided grants, concessional loans and debt relief in 2020, including for 38 countries considered as “high risk”.

Fiscal adjustment and, in a few cases, debt restructuring should contribute to debt reduction. Almost everywhere, credible medium-term strategies must be developed, with the aim of stabilizing and gradually reducing debt to safer levels over time, supported by pro-growth and inclusive policies, he said. declared.

Gasper said low-income developing countries urgently need funding for social services, health and education, COVID-19 control measures and support for food programs in countries facing the risk of COVID-19. malnutrition. The IMF, he said, is helping and remains committed to providing additional support. Since the start of the pandemic, it has provided financing totaling approximately $105 billion to more than 80 countries, five of which are low-income developing countries. More than $285 billion is committed in total out of a lending capacity of $1 trillion.

Many poor countries need additional support in the form of grants, concessional loans and debt relief. This includes the debt service suspension initiative, but on a case-by-case basis, deeper debt treatments may be needed, including restructuring, Gasper said.

Affirming that the international community must act together to foster inclusive growth, Gasper called for the universal availability of effective vaccines. “Health must come first, and the lifeline must be targeted when needed. COVID-19 will not be under control anywhere until it is under control everywhere. The sooner that happens, the sooner the economic activity will pick up, the sooner the jobs will come back,” Gaspar told reporters.

“Making effective vaccines universally available is the number one priority, Lifeline should be targeted to the most vulnerable and maintained based on developments in the spread of the virus,” he said. In releasing the annual budget monitor update, Gasper called for facilitating the transition to a smart, green, resilient and inclusive growth model. “This applies to support today and becomes even more important as the recovery takes hold,” he said.

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New Chapter 12 Bill Would Offer Debt Relief to More Family Farmers

The recently introduced Family Farmer Support Act 2019 (S.897) will help family farmers reorganize after facing difficult times, which more and more of them are experiencing due to the uncertainty of some export markets, lower prices for some farm and ranch products. and other factors.

Recognizing the unique challenges faced by family farmers, Congress in 1986 established Chapter 12 of the US Bankruptcy Code, which removes some costly reorganization requirements for large corporations.

“Our farmer members have experienced consecutive years of low commodity prices and the consequent low profitability and low farm incomes. As a result, farmers and ranchers are seeing their equity eroded as their debt ratio rises and debt financing hits a 30-year high. The double whammy of record farm debt and poor economic conditions has led many farmers to file for Chapter 12 bankruptcy as an option for debt relief and restructuring,” said Zippy Duvall, president of the American Farm Bureau Federation.

While Chapter 12 has helped many family farmers, its $4.1 million debt limit has kept many others from using it. The Family Farmer Assistance Act of 2019 would allow more family farmers to apply for relief under the program by raising the cap on Chapter 12 operating debt to $10 million.

‘Removing the liability cap and giving more farmers the opportunity to qualify for Chapter 12 bankruptcy provides the restructuring and seasonal repayment flexibility that many farmers need in today’s lagging farm economy’ today and will help align bankruptcy law with the scale and credit needs of American agriculture,” Duval said.

The bipartisan bill, backed by the Farm Bureau, was introduced by Sen. Chuck Grassley (R-Iowa) and co-sponsored by Sen. Amy Klobuchar (D-Minn.), Ron Johnson (R-Wis.), Patrick Leahy (D-Vt.), Thom Tillis (RN.C.), Doug Jones (D-Ala.), Joni Ernst (R-Iowa) and Tina Smith (D-Minn.).

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Biden says he won’t back $50,000 student loan debt forgiveness plan – WSOC TV

Regarding the cancellation of student loans for millions of Americans, the president said he would not support a proposal that top Democrats want him to support.

President Joe Biden wants to forgive $10,000 of student debt per borrower in response to the COVID-19 crisis, which could wipe out debt for 15 million Americans and reduce balances for millions more.

Federal data shows that more than a third of federal borrowers could see their balances drop to zero if $10,000 were forgiven.

Prominent Democrats, however, want the president to do more. They said canceling $50,000 per person would eliminate debt for 36 million Americans.

They urge the president to take executive action as the economy and Americans battle the coronavirus pandemic.

But Biden said he wouldn’t.

“I’m not going to make that happen,” Biden said. “It depends on whether you go to a private university or a public university.”

Biden and former President Trump have suspended federal student loan payments during the coronavirus pandemic. This suspension will last until the end of September.

For more information, you can go to in line or call the Federal Student Aid Information Center at 800-433-3243.

Biden officials consider action on student debt relief

The Biden administration is considering whether it can take steps to provide student debt relief through executive action, even as it continues to ask Congress to pass legislation to help borrowers and their families.

A tweet from White House press secretary Jen Psaki appeared to go further than her comments during a briefing earlier Thursday, when she said President Joe Biden was counting on Congress to act next. on student loan relief. Biden said he supports up to $10,000 in student loan forgiveness per borrower.

“The President continues to support student debt cancellation to provide relief to students and families,” Psaki tweeted. “Our team is looking at whether there are any steps he can take through executive action and he would be happy to sign a bill sent to him by Congress.”

It came hours after a group of Democrats urged Biden to use executive action to forgive $50,000 in federal student debt for all borrowers. The group, which included Senate Majority Leader Chuck Schumer of New York and Senator Elizabeth Warren of Massachusetts, said it would boost the economy and help close the country’s racial wealth gap.

Biden has previously said he supports erasing up to $10,000 in student debt through legislation, but he has not expressed interest in pursuing executive action. In a briefing before posting his statement on Twitter, Psaki appeared to reject the idea of ​​using presidential powers to wipe out debt, saying Biden had already suspended student loan repayments during the pandemic.

“He would look to Congress to take the next steps,” she said.

Legal scholars have fallen back and forth over whether Biden has the power to deal with loan relief himself, with some saying the move is unlikely to survive a legal challenge.

The Trump administration moved to block broad debt cancellation in early January, issuing an Education Department memo concluding that the secretary had no authority to provide such assistance and that it would be up to Congress.

Schumer said he and Warren researched the matter and concluded “it’s one of those things the president can do on his own.” Past presidents have written off debt, Schumer said, but not on the scale proposed.

Democrats are pushing the issue as a racial justice issue and as COVID-19 relief. They rely on statistics showing that black and Latino borrowers are more likely to go into debt and take longer to repay their loans.

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G7 supports extension of G20 debt freeze and calls for reforms

WASHINGTON (Reuters) – G7 finance ministers on Friday backed an extension of the G20’s bilateral debt relief initiative for the world’s poorest countries, but said it needed to be revised to address shortcomings. shortcomings that hinder its implementation.

In a lengthy joint statement, ministers from the Group of Seven advanced economies said they “deeply regret” the decisions of some countries not to participate by classifying their public institutions as commercial lenders.

Two officials from G7 countries said the benchmark was clearly aimed at China, which declined to include loans from the state-owned China Development Bank and other government-controlled entities in the total official of its bilateral debt when dealing with countries seeking debt relief.

Ministers also acknowledged that some countries will need further debt relief in the future and urged the Group of 20 major economies and Paris Club creditors to agree on terms by the meeting. G20 finance ministers next month.

“Everyone was disappointed with China’s lack of transparency and engagement,” said an official, who asked not to be named.

In an online meeting hosted by US Treasury Secretary Steven Mnuchin, ministers underlined their commitment to working together to support the poorest and most vulnerable countries, which have been hit hard by the coronavirus pandemic.

They called on the International Monetary Fund and the World Bank to provide regular updates on the financing needs of low-income countries and to propose solutions to expected financing gaps, including through instruments to leverage advantage of access to private finance.

They said the Debt Service Suspension Initiative (DSSI) endorsed in April by G20 countries, including China, had helped 43 countries defer $5 billion in official debt service payments in order to release money to respond to the pandemic.

But the total is well below the $12 billion in savings originally projected and represents just over half of the more than 70 eligible countries.

Ministers said the initiative should be expanded, “in the context of a request for IMF financing”, and called for a new condition sheet and memorandum of understanding to improve its implementation.

The ministers said that claims classified as commercial under the DSSI would also be treated as such in future debt treatments and for the implementation of IMF policies, sternly reminding China and other countries that do not have not been fully transparent about the scope and terms of government loans to the poor. countries.

Ministers also called again on private lenders to implement the on-demand debt relief initiative, noting that the lack of private sector participation has limited the potential benefits for several countries.

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Direct Relief to get a slice of MacKenzie Scott’s billions

From its warehouse near the Santa Barbara airport, Direct Relief distributes COVID-19 medicine and other supplies around the world. (Lara Cooper/Direct Relief)

When MacKenzie Scott announced recently that she had donated nearly $4.2 billion to charities in the United States, one of the 384 recipients on her list was Direct Relief, the non-profit organization based in Santa Barbara which distributes medical aid all over the world.

Direct Relief plans to disclose both the exact amount of the donation and the specific program it will fund in the coming weeks. Tony Morain, the nonprofit’s vice president of communications, said it was “a historic amount for Direct Relief”, one of the largest cash donations in the organization’s history.

Direct Relief learned of Scott’s gift like the rest of the world, Morain said, when the Amazon billionaire posted “384 ways to help” on Medium.

“It was a surprise, and we were grateful and humbled,” Morain said. “She did her due diligence; she researched each of the organizations independently. For Direct Relief, it was a good surprise in a difficult year. … The manner in which she made the donation was inspiring, that someone would choose to give an unprecedented amount of philanthropic dollars at a rate that had never been done before, without asking for anything in return.

Since divorcing Amazon founder Jeff Bezos last year, Scott has become one of the world’s biggest philanthropists. The new $4.2 billion round comes on top of the $1.7 billion she gave in July to 116 organizations, including major gifts to historically black colleges and universities.

Scott’s new round of donations is focused on helping those impacted by the COVID-19 pandemic and “long-term systemic inequalities that have been deepened by the crisis,” she wrote on Medium. Beneficiaries include healthcare providers, food banks, civil and legal advocacy funds, as well as groups that provide debt relief, education, job training and financial services to underserved communities. .

Scott wrote that she used a team of advisors this time around, and they took “a data-driven approach to identifying organizations with strong leadership and results teams, with a focus on those operating in communities facing high food insecurity, high measures of racism, inequality, high local poverty rates, and low access to philanthropic capital.

Direct Relief is the largest non-profit organization in the tri-county area and one of the largest in the country. A recent Forbes report placed it third nationally with $2 billion in private donations, behind only United Way and Feeding America.

Most of this income comes from donations of medicines and other supplies. Cash donations like Scott’s accounted for $171 million in the 2019-20 fiscal year, while goods and services donated to Direct Relief were worth $1.82 billion.

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Zimbabwe advised improving human rights and paying off debts for relief

Zimbabwe flag image

One of Zimbabwe’s biggest creditors turned down a government request for debt relief until it improved its human rights record and paid off outstanding debt arrears.

The southern African country’s appeal for relief was rejected in a June 12 letter to Zimbabwe’s Minister of Finance Mthuli Ncube from Odile Renaud-Basso, president of the Paris Club.

The group, to which Zimbabwe owed $ 3.26 billion in 2018, represents creditor countries, including members of the Organization for Economic Co-operation and Development.

The letter, seen by Bloomberg, was in response to an April 2 appeal from Ncube to chiefs of the International Monetary Fund, world Bank, African development bank, Paris Club and European Investment Bank search for an arrears clearance and debt relief program.

Zimbabwe’s relations with multilateral lenders have been strained for nearly 20 years as it has failed to meet its payments and a series of elections has been marred by violence and irregularities.

“Zimbabwe’s desire to normalize its relations with the international community can only progress after the implementation of fundamental economic and political reforms,” said Renaud-Basso. The necessary reforms relate to “respect for human rights, in particular freedom of assembly and expression,” she said.

Debt relief was a key part of Ncube’s strategy to revive the economy after two decades of stagnation. But attempts to drive economic reforms and improve relations with lenders have been thwarted by the Zimbabwean security forces’ violent crackdown on a series of protests.

Schwan Badirou-Gafari, secretary general of the Paris Club, declined to comment, as did Clive Mphambela, spokesperson for the Zimbabwean Treasury.

(With contributions from Bloomberg)

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Thinktank Asks Sunak to Help Debt “Zombie Companies” | Debt relief

One in five businesses in Britain is a ‘zombie business’ struggling to stay afloat after a boom in corporate debt levels during the coronavirus pandemic, a leading Tory think tank has warned.

Calling the chancellor, Rishi sunak, to use the autumn budget to launch a corporate debt relief program, think tank Onward said crippling debt levels accumulated during the crisis will hamper the UK’s economic recovery.

Onward, led by a former senior adviser to Therese May – and with close ties to the Treasury and an advisory board filled with big Tories – debt accumulated during the lockdown could push 4.3% of UK businesses – employing 1.8 million people – to technical insolvency.

He said a debt relief program should be used to allow companies to gradually repay state-guaranteed loans taken out during the crisis, via a surtax on profits and shareholder payments. It would depend on the income level of a business, similar to the student loan system for tuition.

After the lockdown ended economic and social life this spring, plunging the UK economy into its deepest recession on record, more than £ 52 billion was borrowed by UK businesses, thanks to loans from emergency guaranteed by the State.

Onward said rising debt levels meant up to 20% of UK businesses were now ‘zombies’ – meaning their profits only cover the ongoing cost of their debt interest payments . He said companies burdened with debt would be less likely to invest to boost Britain’s economic rebound after the pandemic.

The intervention comes as banks bolster their teams of debt advisers to deal with a flood of corporate insolvencies triggered by the pandemic. HSBC UK plans to almost triple the size of its debt management team by year-end increase in defects.

The bank’s financial distress team, which deals with businesses and individual customers overdue on loans, credit cards or mortgages, has already doubled its workforce to 800 employees since the Kingdom’s shutdown United in March.

“We will probably pass 1,000 before the end of the year,” Stuart Haire, head of retail banking and wealth management at HSBC, told The Guardian.

An interactive debt chart

Staff will undergo mandatory training on how to deal with vulnerable borrowers and some of them will be trained on how to approve a wider range of forbearance options for clients who might otherwise have difficulty repaying. their debts. Several “specialists” will also be present to treat more complex cases.

Lloyds is moving up to 600 employees who previously handled Payment Protection Insurance (PPI) abuse claims to a team in financial difficulty.

NatWest has grown its debt management team from 1,000 to 1,650 since March, while Santander has added dozens of employees to its personal and business debt management units.

The UK’s top four lenders have so far this year set aside a collective £ 15.6bn in provisions for Covid-linked loans – money to cover a potential default. HSBC has set aside $ 3.8 billion (£ 2.9 billion) in the second quarter alone, including $ 1.5 billion related to its UK operations. Lloyds has set aside £ 2.4 billion to cover bad debts in the second quarter.

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Options for Paying Off Your Debt: Debt Relief Orders

Debt Relief Orders (scrutineers) are a way to pay off debts if you owe less than £ 30,000, don’t have a lot of income, and don’t own your home.

If you get one:

  • your creditors cannot get their money back without court authorization
  • you are usually released (“released”) from your debts after 12 months

Get a debt relief order

You get a Scrutineer from the official receiver, a bankruptcy court officer, but you must apply through a licensed debt counselor. They will help you fill out the paperwork.

There is a list of organizations that can help you find a licensed debt counselor in the scrutineers.


The costs of the official receiver are £ 90. Your debt counselor can tell you how and when to pay it off. In some cases, a charity may be able to help you with the cost – ask your debt counselor.


You are generally eligible if you meet all of these criteria:

  • you owe less than £ 30,000
  • you have less than £ 75 per month of side income
  • you have less than £ 2,000 in assets
  • you do not own a vehicle worth £ 2,000 or more
  • you have lived or worked in England and Wales for the past 3 years
  • you did not ask to Scrutineer in the last 6 years


You have to follow rules called “restrictions” if you get a Scrutineer.

This means that you cannot:

  • borrow more than £ 500 without notifying the lender of your Scrutineer
  • act as director of a company
  • create, manage or promote a business without court authorization
  • run a business without talking about your Scrutineer

If you want to open a bank account, you may also need to inform the bank or mortgage company of your Scrutineer.

The restrictions generally last 12 months. They can be extended if reckless or dishonest behavior caused your debt problem. For example, you lied to get credit.

The official receiver will tell you if they need to be extended. To extend them, you will be asked to accept a “Debt Relief Restriction Commitment”. The court can issue a “debt relief order” if you don’t agree.

What would you like to know

While you have a Scrutineer you still have to pay:

  • your rent and bills
  • certain debts, for example student loans, court fines

scrutineers can be canceled if:

  • your finances are improving
  • you do not cooperate with the official receiver – for example you do not give him the information he asks for

If you incur new debt after your Scrutineer is approved, you can:

  • get a bankruptcy order
  • be sued if you do not inform the new creditors of your Scrutineer

Your Scrutineer is added to the personal insolvency register – it is deleted 3 months after the Scrutineer ends.

Your Scrutineer will remain on your credit report for 6 years.

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World Bank and IMF advocate for debt relief for the poorest countries

ISLAMABAD: The World Bank Group and the International Monetary Fund (IMF) in a joint statement on Wednesday called on all official bilateral creditors to suspend debt payments from countries of the International Development Association (IDA) which request the abstention following the outbreak of the COVID-19 virus.

Pakistan is also on the list of 76 countries eligible to receive IDA resources under concessional loans. Pakistan owed about $ 11 billion to official bilateral creditors of the Paris Club countries and Islamabad had already obtained debt relief in 2002-2003 for 10 years when Pakistan decided to support the United States in its war against terrorism in the aftermath of September 11, 2001. During this period, Pakistan had benefited from a tax cushion on the debt repayment front of official bilateral Paris Club donors. Pakistan had to sign an agreement with each country separately after making an agreement to get a Paris Club concession. It is not yet clear whether Islamabad would seek debt relief from official donors or not at this point, as this correspondent made an effort to contract Federal Minister of Economic Affairs Hammad Azhar to get the version and also sent him a message. but received no response until this report was tabled. .

However, the World Bank Group and the International Monetary Fund issued a joint statement to the G20 regarding debt relief for the poorest countries and said the coronavirus outbreak is likely to have serious economic consequences. and social for the IDA countries, which are home to a quarter of the world’s population and two-thirds of the world’s population live in extreme poverty.

He said that with immediate effect – and in accordance with the national laws of creditor countries – the World Bank Group and the International Monetary Fund are calling on all official bilateral creditors to suspend debt payments from IDA countries seeking forbearance. . “This will help meet the immediate liquidity needs of IDA countries to meet the challenges posed by the coronavirus epidemic and will allow time for an assessment of the impact of the crisis and the financing needs for each country,” added the joint press release.

“We invite the leaders of the G20 to instruct the World Bank Group and the IMF to carry out these assessments, in particular by identifying the countries with unsustainable debt, and to prepare a proposal for comprehensive action by the” bilateral creditors ” We will seek approval of the proposal from the Development Committee at spring meetings (April 16 and 17).

“The World Bank Group and the IMF believe it is imperative at this time to provide a sense of global relief to developing countries as well as a strong signal to financial markets. The international community would welcome the support of the G20 to this call to action, ”he added. concluded.

Meanwhile, Federal Economic Affairs Minister Hammad Azhar said, “We welcome the joint WB and IMF statement calling on G20 countries to suspend debt payments from dev [developing] countries. Prime Minister Imran Khan has urged this since the COVID-19 pandemic. We hope that it will be accepted, and we also urge the multilaterals to reduce their debts. “

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Chinese debt could implode emerging markets

The new coronavirus has crippled the global economy. Global growth is expected to drop from 2.9% last year to deeply negative territory in 2020, the only year after 2009 that this has happened since World War II. Recovery is likely to be slow and painful. Government restrictions aimed at preventing the resurgence of the virus will inhibit production and consumption, as will defaults, bankruptcies and staff cuts that have already produced record unemployment claims in the United States.

But not all countries will endure the pain of the global recession equally. Low-income countries suffer from poor health infrastructure, hampering their ability to fight the coronavirus, and many of them had dangerously high debt levels even before the pandemic required emergency spending massive. Foreign investors are now withdrawing capital from emerging markets and sending it back to the rich world in search of a safe haven. As a result, countries like South Africa, Kenya and Nigeria see their currencies drop in value, making it difficult, if not impossible, to service foreign loans.

Faced with the threat of financial ruin, poor countries have turned to multilateral financial institutions such as the International Monetary Fund and the World Bank. The IMF has already released emergency funds in at least 39 countries and, by the end of March, more than 40 more had approach there for help. The World Bank has accelerated $ 14 billion for crisis relief efforts. Yet even if they offer extraordinary amounts of aid, the IMF and the World Bank know that these amounts will be far from sufficient. For this reason, they called on the Group of 20 creditor countries to suspend the collection of interest payments on loans they have made to low-income countries. On April 15, the G-20 pledged: all of its members agreed to suspend these repayment obligations until the end of the year – all but one member, that is.

China has adhered to the G-20 pledge but added caveats that mock it. China is effectively excluding hundreds of large loans made under its Belt and Road Initiative (BRI) for infrastructure development. “Preferential loans,” such as those granted by the Import-Export Bank of China (EximBank), “are not applicable to debt relief,” the Beijing spokesperson said. World time the day after the G-20 announcement. EximBank has funded more than 1,800 BRI projects in dozens of countries. By continuing to demand interest payments on loans, China will force poor countries to choose between servicing their debts and importing essentials such as food and medical supplies.


Based on the information we have gathered from a wide range of sources, we estimate that between 2013 and 2017, China lent more than $ 120 billion to 67 countries, mostly developing, through the BIS. Exact figures are impossible to obtain due to the opacity of these loan agreements. But the loan growth that China reported for 2018 and 2019 suggests that these countries’ BIS debts now total at least $ 135 billion.

China has granted nearly half of all new loans to countries considered to be at high risk of default.

Figures like these put China as the number one international lender. In 2017, Pakistan, for example, had borrowed at least $ 21 billion from China, or 7% of its GDP. South Africa had borrowed about $ 14 billion, or 4% of its GDP. Both countries, like many others, owe much more to China than to the World Bank. Other countries owe China even more as a percentage of GDP. We estimate that in 2017, Djibouti’s debts to China totaled 80% of GDP; Ethiopia accounted for almost 20% of the GDP. And Kyrgyzstan, one of the first countries to receive IMF funds for the coronavirus, owed China more than 40% of its GDP. Since 2013, China has provided almost half of all new loans to countries considered to be at high risk of default.

China charges substantial interest on its loans. Although Beijing calls its rates “preferential,” some BRI projects, especially the larger ones, bear interest rates. more than three percentage points higher than the cost of capital of Chinese banks, about four to six percent. World Bank dollar loans to low-income countries, on the other hand, tend to have low rates. just above one percent. And given that China itself is one of the World Bank’s biggest borrowers, with $ 16 billion in outstanding loans, the country effectively borrows cheaply from the developed world and repays, through the BIS, a significant increase.


Chinese low-income borrowers depend on the dollar, the euro, and other major foreign currencies to pay for their imports and repay their debts. But many lack sufficient reserves to cover both. Zambia, a BRI client who has borrowed more than 6 billion dollars from China, has enough reservations cover only two-thirds of the foreign payments it will have to make in the coming year. Imports and debt servicing over the next year are expected to wipe out South Africa’s total reserves. If these countries default on their sovereign debt, which increasingly seems likely, they would be excluded from international credit markets and unable to manage the fiscal and trade deficits needed to curb the pandemic.

If the developing world cannot repay its debts, the global health and economic crisis will only worsen.

However, these countries are not the only ones to suffer from it. Even if defaults only start in a few countries, they will spread widely as investors flock to US Treasuries, German Bunds, gold and other traditional safe havens. At the beginning of April, foreign investors had already took of over $ 96 billion from all emerging markets, an exit rate well above that of the last financial crisis. As a result, the South African rand and the Brazilian real have each fallen 25% so far this year. Additional capital outflows will push these currencies down any further, the costs of sending essential imports are skyrocketing. Food prices are already prick across Africa. The United Nations projects that the continent will need to spend an additional $ 10.6 billion on health care this year to fight the pandemic, with foreign medical supplies and pharmaceuticals making up a large part of that. Increased capital flight therefore means greater malnutrition, faster disease transmission and more migration.

In short, if the developing world cannot repay its debts, the global health and economic crisis will only get worse. China, where the pandemic started, has certainly taken an economic hit. But with over $ 3 trillion in foreign exchange reserves and a currency that has remained stable throughout the crisis, it is much better positioned to weather the storm than most of its borrowers. These borrowers, with plummeting currencies, capital flight and threatening medical bills, are unable to repay the BIS to China.

Although commentators have long compared the BIS to a Marshall Plan for developing countries, the two initiatives could not be more different in their approach. The size of the funding may be comparable (US Marshall aid was worth about $ 145 billion in current dollars), but the similarities end there. Marshall aid consisted entirely of grants, while BIS funding consisted almost entirely of debt. This debt is now choking developing countries as they struggle to emerge from a devastating pandemic. Rather than adding to their woes, China should do its part to help lift these nations out of the crisis. It can start by declaring a full moratorium on BIS debt repayment until at least mid-2021.


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Remarks by Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator Mark Lowcock – World

At the high-level event on financing the 2030 Agenda for Sustainable Development in the Age of COVID-19 and beyond – as delivered

New York, September 29, 2020

Zeinab, thank you.

Excellencies, it has been a year of unpleasant surprises.

The virus itself, of course, took us by surprise.

Many were surprised by the severity of the global recession it brought about.

But we were not surprised that this recession hit hardest the fifty or so countries where some 100 million people already survive only thanks to the help they receive from humanitarian agencies like the ones I coordinate.

Some, however, were surprised at how quickly the damage was done.

As David Malpass has just said, for the first time since the 1990s, extreme poverty will increase. Life expectancy will drop. The annual number of deaths from HIV, tuberculosis and malaria is expected to double. The number of people at risk of starvation could also double.

The carnage is concentrated in the most vulnerable countries.

As the new report from goaltenders Bill and Melinda Gates indicates, the past 25 weeks threaten to destroy 25 years of developmental progress.

It is worth remembering what many poor countries looked like 25 years ago. I was working in a country where a quarter of children never saw their fifth birthday, most never went to school, and one in 18 women died in childbirth. Do we really want to get it all back?


All the more surprising, then, that while richer countries have rightly rejected the rules for injecting liquidity and budget support into their own economies to protect their own citizens, they have done so little to protect countries. the poorest – who don’t have the capacity, resources or access to markets to do the same.

It’s surprising at first since everyone knows what to do. Many of the actions needed, especially to mobilize international financial institutions to help the most vulnerable countries, were taken as recently as the 2008-09 financial crisis.

This is surprising in the second place because much of what needs to happen would cost the better-off countries very little in budgetary terms, especially in the short term.

And third, it’s surprising that the richer countries don’t take action now is not just a failure of generosity or empathy. It is an act of self-harm. Like the virus, the problems that will be created by the huge economic contraction we are witnessing will come back to bite everyone. All around the world.

All the poverty, hunger, disease and suffering will fuel grievances and despair. And in their wake will come conflict, instability, migration and refugee flows, all providing relief to extremist and terrorist groups.

The consequences will be far away and will last a long time.

And no one will be able to say that he was surprised by it.

So let’s surprise ourselves in a positive sense.

Let’s take the obvious, inexpensive, self-interested and generous steps to mitigate all of this now.

Protect aid budgets, expand and expand debt relief as Kristalina said, beyond the debt service suspension initiative, issue SDRs and devote them to the poorest countries, and use the balance sheets of shared financial institutions more aggressively to protect the most vulnerable.

Thank you very much.

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How Will Debt Settlement Affect My Credit Rating?

Debt settlement usually has a negative impact on your credit rating. The negative impact depends on many factors: the current state of your credit, your reporting practices, creditors, the size of the debts being settled, whether your other debts are in good standing, how much less than the initial balance for which the debt is settled, and a host of other variables.

Key points to remember

  • While debt settlement may be the best option for eliminating past due obligations, it can negatively impact your credit score.
  • Ironically, stronger credit scores are harder to settle through debt settlement than poorer ones.
  • The best type of debt to settle is a single large debt that is one to three years past due.
  • Don’t try to pay off debt at the cost of falling behind on your other obligations.

Why debt settlement can hurt your credit score

Why would that have a negative impact, when you ease the burden of your obligations and your creditors get the money? Because strong credit scores are designed to reward accounts that were paid on time according to the original credit agreement before they are closed.

A debt settlement plan, in which you agree to repay a portion of your unpaid debt, modifies or cancels the original credit agreement. When the lender Closes the account due to a change in the original contract (as is often the case after settlement is complete), your score is lowered. Other lenders will likely take note and be wary of giving you credit in the future as well.

Nonetheless, it is possible that reducing the debt burden will lead to a subsequent drop in your credit score. The top credit card account balances and late or missed payments have probably already reduced it somewhat. If debt settlement is the path to a healthier financial future for you, this should be considered.

Let’s take a look at the process in more detail.

Will Paying Off Your Old Debt Increase Your Credit Score?

How Debt Settlements Work

As you know, your credit report is a snapshot of your financial past and your present. It shows the history of each of your accounts and loans, including the original terms of the loan agreement, your outstanding balance amount against your credit limit, and whether payments were made on time or on time. no. Each late payment is recorded.

You can negotiate a debt settlement agreement directly with your lender or seek help from a debt settlement company. Either way, you agree to only repay a portion of the outstanding debt. If the lender agrees, your debt is reported to credit bureaus as “payment paid”.

Although this is better for your report than a to cushion-it may even have a slightly positive impact if it erases delinquency– it does not have the same meaning as a note indicating that the debt has been “paid as agreed”.

The best case is to negotiate in advance with your creditor so that the account is declared “paid in full” (even if it is not). It doesn’t hurt your credit score as much.

What kind of debt do I have to pay off?

Since most creditors are unwilling to settle debts that are up to date and serviced with timely payments, you had better try and come to an agreement for older and seriously overdue debts, perhaps something that has already been taken to a collection service. It sounds counterintuitive, but in general your credit score drops less as you become more delinquent in your life. Payments.

However, keep in mind that if you have an unpaid debt that was sent to collectors over three years ago, paying it off through debt settlement could reactivate the debt and make it appear like a running collection. Make sure you understand your creditor before finalizing any deal.

A debt settlement stays on your credit report for seven years.

As with all debt, larger balances have a proportionately greater impact on your credit score. If you are settling small accounts, especially if you are aware of other larger accounts ready—Then the impact of a debt settlement may be negligible. Plus, settling multiple accounts hurts your score more than settling just one.

Debt Settlement vs Staying Up to Date

In your credit history, the most important weight is given to the history of payments, the current accounts having the most impact.If you are behind on other debts, it’s important to try to keep a newer one first. current account in good standing before attempting to rectify a long overdue account.

For example, if you have a car loan, mortgage, and three credit cards, and one of them is over 90 days past due, don’t try to settle that debt at the expense of other obligations. An unpaid account is better than having late payments on multiple accounts.


The average amount of savings a consumer sees after debt settlement, according to the American Fair Credit Council.

It will also seem counterintuitive, but the stronger your credit score is in front of you. negotiate a debt settlement, the greater the fall. The Fair Isaac Corporation, the group behind the FICO score (the most common type of credit score) gives a scenario where a person with a credit score of 680 (who is already overdue on the credit card) would lose between 45 and 65 points after the payment is settled. debt for a credit card, while a person with a credit score of 780 (with no other late payments) would lose between 140 and 160 points.

The bottom line

Focused towards suffering debt can be scary, and you may want to do whatever you can to get out of it. In this situation, a debt settlement arrangement seems to be an attractive option. From a lender’s perspective, it may be better to arrange for payment of some, but not all, of the outstanding debt than to receive none. For you, a debt settlement has an impact on your credit report, but it can help you fix problems and rebuild.

Take into account opportunity cost not to pay off your debt. If you don’t settle for it, your score isn’t affected right away. However, non-payment can lead to late payments, defaults and collection attempts by credit agencies. These scenarios can end up hurting your score further in the long run. Occasionally, debt relief is the best option, but a clean slate is almost always good.

Think about taxes. The IRS generally considers the forgiven or forgiven debt as taxable income.Ask your tax advisor about the possible tax implications of a debt settlement.

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Biden considers executive action to provide federal student loan debt relief – FOX23 News

WASHINGTON – President Joe Biden plans to take executive action to provide federal student loan debt relief to borrowers nationwide as he continues to call on Congress to take action amid the pandemic of coronavirus in progress.

>> Read more trending news

In a Twitter post Thursday, White House press secretary Jen Psaki said members of Biden’s team were considering his options.

“The president continues to support the cancellation of student debt to provide relief to students and families,” she wrote. “Our team is examining if there are any steps he can take through executive action and would welcome the opportunity to sign a bill sent to him by Congress.”

The announcement came after Psaki told a press conference that Biden “is calling on Congress to draft the proposal.” Previously, Biden had indicated that he was not sure that as president he would have the power to write off large swathes of student debt.

“I think it’s pretty questionable,” he said in December, according to Politico. ” I’m not sure of it. I probably wouldn’t do that.

A group of Democrats, including Senate Majority Leader Chuck Schumer of New York and Senator Elizabeth Warren of Massachusetts on Thursday urged Biden to use executive action to cancel $ 50,000 from the Federal student loan debt for each borrower. They presented the student loan forgiveness as a social justice issue that would particularly affect students of color and help close the country’s racial wealth gap.

“There’s not much the president can do with the stroke of a pen that will boost our economy more than canceling $ 50,000 in student debt,” Schumer said Thursday at a conference. press with Warren and other progressive lawmakers pushing for student debt relief. “It’s one of those things the president can do on his own.”

Republicans have opposed proposals to write off student loan debt, saying it unfairly shifts the burden from borrowers to taxpayers.

In a hearing Wednesday with Biden’s choice to lead the Department of Education, Sen. Richard Burr, RN.C., urged the president not to pursue the cancellation of student loan debt, which he called it “dangerous and reckless”. Instead, he called on Biden to work with Senators to pass legislation “that dramatically simplifies student loan repayment options, allows borrowers to pay whatever they can reasonably afford, capped at 10 percent of their discretionary income, and having their loan canceled after 20 years. “

Economists have also questioned whether a decision to write off student debt would have the desired effect. A analysis published in October by the Brookings Institution found that nearly 60% of unpaid student debt was owed by people with household income over $ 74,000, while those with the lowest incomes accounted for just under 20% of the debt unpaid.

In one editorial published in NovemberJames Looney, a former Treasury Department official and senior researcher at the Brookings Institution, said that forgetting $ 50,000 in student loan debt for each borrower would cost around $ 1,000 billion and would be one of ” largest transfer programs in US history “.

“And its most important effect would be to improve the finances of workers who have graduated from college, who have already tended to be winners in an economy marked by ever-growing inequalities,” he wrote.

Calls for debt cancellation have escalated after years of rising tuition fees that have contributed to the increase in national student debt. More than 43 million Americans owe a total of $ 1.6 trillion in federal student loans, The Wall Street Journal reported.

In an effort to provide relief shortly after last year’s pandemic, the administration of former President Donald Trump suspended federal student loan payments and set interest rates at zero percent. When he took office, Biden extended the moratorium until at least September 30.

The Associated Press contributed to this report.

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Kenya to save $ 245 million with Chinese debt service suspension deal

China is one of Kenya’s largest foreign creditors, having loaned it billions of dollars to build railways, roads and other infrastructure projects over the past decade.

Kenya obtained a moratorium on debt repayment from China which will save him 27 billion shillings (245.23 million dollars) by June, his finance minister said on Wednesday (January 20).

The East African nation last week won a debt relief deal with the Paris Club of international lenders and is seeking deals with non-Paris Club bilateral creditors like China.

China is one of the country’s largest foreign creditors, having loaned it billions of dollars to build railways, roads and other infrastructure projects over the past decade.

Ukur Yatani, the finance minister, said the deal had already been reached, although China said on Monday (January 18) that it was ready to help Kenya get into debt, without giving further details.

“We are not going to pay now, but we are going to pay in the future,” Yatani said in an interview with private radio station Spice FM, referring to the figure of 27 billion shillings which was due.

The impact of the COVID-19 pandemic has hurt Kenya’s tax revenue collection at a time when more of its debts are falling due and it is still grappling with yawning budget deficits.

China has signed debt service suspension agreements with 12 African countries and granted waivers of interest-free loan due to 15 African countries as part of the G20 debt service suspension initiative , its embassy in Nairobi announced on Monday.

Kenya’s total debt jumped to 65.6% of gross domestic product in June 2020, from 62.4% a year earlier, the World Bank said in November. –

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Zambia seeks debt restructuring under common G20 framework

Zambia’s debts include $ 3 billion owed to China and Chinese entities

Zambia, now Africa’s first sovereign default in the era of the pandemic At the end of last year, said Friday (February 5), it had asked for a restructuring of its debt in a new framework supported by the Group of 20 major economies.

The precarious debt burden of a number of African countries has worsened due to the economic fallout from the COVID-19 pandemic. Zambia did not pay a coupon on one of its dollar bonds in November, putting it in default.

The G20 initially offered the world’s poorest countries temporary relief of payments on debt to official creditors as part of its Debt Service Suspension Initiative (DSSI). In November, it is also launched a new framework designed to tackle unsustainable debt stocks.

Zambia is due to start negotiations to establish an aid package with the International Monetary Fund (IMF) next week. And in its statement, the Ministry of Finance said that the treatment of debt under the framework would be based on the debt sustainability analysis prepared in collaboration with the IMF.

All G20 and Paris Club creditors are expected to coordinate their engagement with Zambia through the common framework, the statement said.

Finance Minister Bwalya Ng’andu reiterated his country’s commitment to transparency and equal treatment of all creditors during the restructuring process.

“Our request to benefit from the G20 common framework will hopefully reassure all creditors of our commitment to such treatment,” he said.

Analysts said the request was expected and it was a positive move.

“The key remains to move towards resolving the default and moving towards an IMF program with a credible macro framework,” said Raza Agha, head of emerging markets credit strategy at Legal & General Investment Management.

Zambia’s sovereign dollar bonds were little changed at just over 50 cents on the dollar.

Last week, Chad became the first country to seek debt restructuring under the new framework. Ethiopia has said it will also use the G20 initiative.

Investors tried to assess how use of the framework, which provides for the participation of private creditors, might affect access to international capital markets.

Credit rating agencies have warned that even delaying the payment of coupons on Eurobonds would constitute default.

But some accused private creditors not to do their part in debt relief efforts. World Bank chief David Malpass criticized them for hitchhiking on DSSI relief.

“As the G20 develops this process, it is essential that it compels the private sector to participate,” said Eric LeCompte of Jubilee USA, who advocates for debt relief for poor countries.

Zambia’s $ 3 billion Eurobonds outstanding are not its only debt. It owes $ 3.5 billion in bilateral debt, $ 2.1 billion to multilateral agencies and $ 2.9 billion to other commercial lenders.

He owes around $ 3 billion to China and Chinese entities.

Some private creditors in Zambia have said that a lack of transparency regarding debt to China created an obstacle to their talks with the government.

China has agreed to participate in the G20 common framework, which observers say will require creditors and countries looking to restructure to be more open to information. –

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Zambia requests 6-month Eurobond debt repayment leave

After previously asking for debt relief from China, Zambia now requests suspension of debt service from its commercial creditors

Zambia has asked its international trade creditors for a 6-month debt deferral due to the severe consequences of the coronavirus pandemic, a senior government official told Agence France-Presse (AFP) on Wednesday (September 23).

The government this week requested a suspension of debt service payments for 6 months from October 14 on 3 Eurobonds because its finances had been “seriously affected”, he said in a statement.

The country is in “a very difficult macroeconomic and budgetary situation”, he added.

A finance ministry statement said Zambia had decided to request the G20 debt service suspension initiative and had requested similar relief from its trade creditors.

Africa’s second-largest copper producer has also been hit by declining revenues due to falling metal prices.

“The impact of COVID-19 has been severe, hence a request for a suspension of payments,” Treasury Secretary Fredson Yamba told AFP.

Zambia had contracted 3 Eurobonds for a total amount of $ 3 billion – funds that were mainly spent on infrastructure development such as road construction.

The landlocked southern African country has already defaulted on some loans acquired for several construction projects, including those funded by China, leading to the suspension or abandonment of some.

“This is confirmation that Zambia is bankrupt,” independent analyst Mambo Haamaundu said. “Our cash flow is depleted and now we have to ask investors to give us time.”

Lenders will closely follow Finance Minister Bwalya Ng’andu’s speech on the 2021 budget on Friday, September 25.

“The demand for the status quo is not surprising given the significant external debt service schedule the government faces,” REDD Intelligence Research’s Mark Bohlund said in a note.

Until recently, the Zambian authorities had dismissed growing concerns about the true size of its external public debt, which had put pressure on the value of government bonds.

In July, President Edgar Lungu China’s demand for debt relief and cancellation due to the economic impact of the coronavirus pandemic. –

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Africa’s debt storm – East African Business Week

Staden bus

CAPE TOWN – The COVID-19 crisis is pushing Africa to the brink of financial collapse. African governments are under pressure to continue servicing their external loans, leaving them few resources to deal with a historic pandemic and its economic fallout. Without external support – in particular, a global freeze on repayments – some African economies will succumb under the burden of their debt. The resulting domino effect could jeopardize the development of the entire continent and also harm the richest countries.

The response from the international community so far has been mixed. The most notable milestone to date – the G20 Debt Service Suspension Initiative (DSSI) for the world’s poorest countries – only covers official bilateral debt. But 61% of African DSSI countries’ debt service payments this year will go to private creditors, bondholders and multilateral lenders like the World Bank. And, despite assurances from the G20, some countries joining the DSSI were subsequently downgraded by global rating agencies.

The World Bank has played an unnecessary role here. Although its chairman, David Malpass, recently called for more debt relief and even raised the possibility of cancellation, he has also resisted calls to the Bank itself (one of Africa’s major lenders). ) to freeze debt repayments. Instead, the US-dominated institution seems more interested in scoring political points by urging the Development Bank of China to join the G20 initiative, even if it would actually affect only one. African country.

Geopolitics also derail the promising option of a new allocation of Special Drawing Rights from the International Monetary Fund (its global reserve asset) to unlock additional liquidity. This initiative is meeting resistance from the administration of US President Donald Trump, which fears that part of the funds will be channeled to countries like Iran.

A major problem for Africa is that it now has significant private sector debt. In May, a group of 25 of the continent’s largest private creditors was formed, in consultation with the United Nations Economic Commission for Africa (UNECA). The organization’s executive secretary, Vera Songwe, lobbied for Africa’s debt to be bundled into an instrument resembling secured debt, backed by an AAA-rated multilateral financial institution or central bank. This would save countries time by quickly granting them a two-year repayment freeze to deal with the pandemic, without preventing them from exploiting future credit markets to finance economic recovery.

But private creditors were quick to reject these comprehensive approaches, insisting that African countries’ debt should be dealt with on a case-by-case basis. This risks wasting so much time that many countries could default while they wait, which would be particularly maddening given the large profits these creditors have made by chasing Africa’s skyrocketing returns.

While neither of these proposals is a quick fix, Africa’s debt problem is not unsolvable. The continent’s debt service payments in 2020 amount to $ 44 billion. That’s a lot of money, but it’s a small change from the trillions of dollars that governments in rich countries are pumping into their own economies.

Pious lamentations about how “the poorest countries will suffer the most” accompany the infighting among Africa’s creditors. This answer assumes that if Africa’s plight is regrettable, it is also far away, and the continent will suffer quietly in its corner. Today, such thinking is terribly naive.

Until the start of this year, many African economies were experiencing robust growth. Now, without outside help to weather the COVID-19 storm, these countries could face economic collapse. It will directly affect the rich world in a way they are not prepared for.

For China, the current debt crisis represents its biggest political setback to date in Africa. The mainland’s economic value to China may have diminished somewhat, but its political value as a reliable voice bloc in multilateral institutions is increasing. If Democratic challenger Joe Biden wins the US presidential election in November, China will face concerted pressure within these organizations. And although China has adhered in principle to the G20 DSSI, its candidacy remains fragmentary and opaque.

The political costs are rising. China is currently facing a chorus of debt-related disapproval in Nigeria, both on social media and in the country’s House of Representatives. Nigerian politicians are demanding an audit of every Chinese loan to the country – an unprecedented move in Sino-African relations. If the economic and debt crisis worsens, this hostility will spread across the continent.

In previous difficult times, African opposition parties campaigned against the Chinese presence in their countries. Increased economic chaos can lead not only to an erosion of high-level African support for China in forums like the UN, but also to populist targeting of Chinese businesses and citizens.

The American engagement in Africa has a strong military and counterterrorism component. American policymakers should therefore be concerned that the Islamic State (IS) recently took control of a port in Mozambique. Africa has 1.2 billion inhabitants, with an average age of 19. A continent of adolescents without economic prospects will not be difficult to radicalize.

Europe is already grappling with the scandal of Greek authorities abandoning African migrants, leaving them to die on the high seas. If African economies collapse, Europe will face an unprecedented migration crisis that eclipses that of 2015, which almost sparked right-wing populist takeovers in several EU countries.

The cost of helping Africa weather this debt storm is miniscule, while the costs of not doing so are staggeringly huge. Many European Union member states have joined the DSSI, and they could support its extension when the G20 and the Paris Club of Sovereign Creditors meet again later this year. But avoiding nightmarish scenarios will require innovation. All of Africa’s financial partners, including multilateral institutions, private creditors and governments of rich countries, must join ECA and other African stakeholders to find a comprehensive and rapid solution.

Cobus van Staden is Senior Foreign Policy Fellow at the South African Institute of International Affairs.

Copyright: Project Syndicate, 2020.

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China’s “Debt Trap Diplomacy” Nonsense Allegations, Misuse of the Truth (US Expert)

Allegations of China’s engagement in “debt trap diplomacy” are “kind of nonsense” and “a distraction” from the fact that Chinese infrastructure financing has strengthened the capacities of many countries to low income to achieve better growth, said an American expert.

“We kind of put that issue aside very early on, without going beyond the low level of seriousness in terms of ‘debt diplomacy’ and ‘modern colonialism’ and that kind of nonsense. I mean it’s really a distraction, frankly, from what’s going on, “Sourabh Gupta, senior researcher at the Washington-based Institute for China-America Studies, told Xinhua on Monday.

“China has been providing resource-linked loans to African countries for over 20 years now. It has been a long time. They have a long track record. There is not a single country that is as such indebted to China,” he said, adding that “you have to understand, of course, that these are very capital intensive projects with long gestation periods.”

“There is no such thing as ‘debt trap diplomacy.’ If there are circumstances in which individual countries have certain problems with the amount of debts, which come due at some point, those debts are The payment profiles are being renegotiated, ”Gupta noted.

“In fact, the reason many Western investors have withdrawn from space is that they cannot afford the risk of doing so. And many Western governments have not even provided much infrastructure related funding anymore. “, did he declare. .

But the point is that such an investment is “very important” for many poor countries, because better infrastructure creates “the foundation and the framework” for them to accelerate economic growth, he said.

China has respectively built more than 6,000 km of railways and roads, nearly 20 ports and more than 80 major power plants across Africa, Chinese Foreign Ministry spokesman Wang Wenbin said at the meeting. ‘a briefing at the end of February.

It has signed debt relief agreements or reached a debt relief consensus with 16 African countries. As part of the Forum on Sino-African Cooperation, China has also waived interest-free loans due at the end of 2020 for 15 African countries, Wang said.

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EU to discuss debt relief for Africa –

EU countries will discuss a request for debt relief from five Sahel countries as part of efforts to help them deal with the coronavirus, European Council chief Charles Michel said on Tuesday (April 28th).

After video interviews with the leaders of the “G5 Sahel” countries – Mauritania, Mali, Burkina Faso, Niger and Chad – Michel said the international community must do more to help Africa fight the pandemic.

Michel said the G5, whose region is on the front line of a nearly eight-year-old assault by armed Islamists, had called for foreign debt cancellation.

“We have agreed to have this debate with the (EU) member states, with our international partners – the IMF in particular,” Michel told reporters after the talks.

Africa is seen as particularly vulnerable to the pandemic, with experts fearing the continent’s weak health systems may not be able to stem the spread of the virus.

On the economic level, the fall in demand for minerals and tourism combined with the effect of confinements to slow the contagion should hammer African economies.

Michel noted that debt relief for Africa was not a new debate, but said the potentially devastating economic impact of the coronavirus had put it back on the agenda.

“I think there is a legitimate question, how is it possible to support African countries by opening this political debate on debt relief,” he said.

The IMF expects Africa’s GDP to shrink by 1.6% in 2020 – its worst result on record – while the World Bank has warned that the region could slip into its first recession in 25 years.

The G20 group of the world’s largest economies agreed earlier this month to a halt to debt payments for the world’s poorest countries, many of which are in Africa.

EU foreign policy chief Josep Borrell tweeted that the bloc had announced “an additional 194 million euros” for G5 security forces as well as the provision of basic services in fragile areas.

He gave no further details on funding, timing or whether it was new funds or funds redirected from elsewhere.

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Calls for sovereign debt relief grow

When the man who led the UK’s austerity program starts campaigning for debt cancellation, you know the idea has become mainstream. Here’s what George Osborne’s chief of staff from 2006 to 2015, Rupert Harrison, said Last week:

He is not the only one. Former Governor of the Banque de France Jacques de Larosière said last week that some sovereigns would need to restructure their debt obligations.

The Peterson Institute, based in Washington, has, for its part, called for a debt stop for low- and middle-income countries, a topic that should dominate the upcoming (virtual) spring meetings of the IMF and the World Bank.

The argument joins the idea that we are on the footing of a war economy.

How? ‘Or’ What? Well, wars are expensive. Taking the UK as an example, we can see in this graph, taken from This article on, that the national debt has increased dramatically in times of conflict (and, of course, financial crisis):

Sometimes this means that sovereigns find themselves unable to meet their financial obligations. The UK, for example, defaulted* on its famous 5% World War I bond, paying off a 3.5% coupon instead.

The government’s response to the pandemic is well on its way to replicating that of a growing battle over the public debt burden. To boot, few now expect a quick and dramatic return to V-shaped growth in the third quarter, with economists now suggesting that quarterly GDP profiles are more likely to look like bathtubs or the Nike swoosh. .

Should we then consider corrective measures, such as the debt restructurings that took place after the Second World War, to revive the economy once the scourge of Covid-19 is rid of? A growing number of mainstream voices are saying yes.

Moreover, this particular conflict comes at a time when central banks are the main holders of public debt in several advanced economies.

The US Federal Reserve held $3.34 billion in US Treasuries as of April 1, making it by far the largest holder of government debt in the world. In the United Kingdom, the Bank of England, an institution created to finance William of Orange’s war with the French, on Friday increased its direct financing of the government by extending the Treasury overdraft facility.

The Bank basically provides a line of credit to governments here. And lines of credit are supposed to be repaid. Just like the coupon and principal of US government bonds held by the Fed. But would central banks, most of which are public institutions, act in the interest of the nation to compel the state to honor its obligations?

The most famous argument for a debt jubilee comes from John Maynard Keynes’s critique of the Treaty of Versailles, the contract designed to settle World War I reparations.

In The Economic Consequences of Peace, Keynes called for a general forgiveness of debts for a war that had strained the finances of Britain and other allies. Most of the debt was owed to the United States which, during the Versailles negotiations, opposed a cancellation of the reparations. Instead, much of the burden was placed on Germany.

The British economist’s argument was that without a debt jubilee, an economic recovery would be impossible and would sow the seeds of the next catastrophe. Over-indebtedness tends to weigh on growth because the money better spent on public spending is spent servicing the debt. A savings paradox can also arise, where the government seeks to save as much as possible, which makes sense for its own balance sheet, but not for an economy left in tatters that requires aggressive state intervention.

Keynes’ view that governments should poach their currencies to fund repayments proved ominously prophetic, as 1920s Germany suffered a period of hyperinflation to fund its reparations:

As inflation rises and the real value of money fluctuates wildly from month to month, all the permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so completely disordered that they have almost no more meaning; and the enrichment process degenerates into a bet and a lottery.

Lessons have been learned. So much so that in 1953 Germany and its creditors, which included governments and banks, signed a spectacular, complex and comprehensive debt relief package. The package paved the way for the Wirtschaftswunder, or economic miracle, of the post-war period. Going through this 2011 article by Adam Tooze of Columbia University:

[The settlement] gave Adenauer’s Germany both a major stake in the emerging international order and the economic muscle to sustain it…

…After 1952, consumer spending fell despite the rising level of economic activity and, for the first time in generations, Germany began to emerge as a great export champion fully capable of meeting its obligations outside…

…Thanks in large part to the decisions of 1952, the immediate result of post-World War II reconstruction was a successful, but narrowly Western European structure built around a conservative West Germany.

However, Tooze told us it’s best not to read too much into the historical parallels here:

It is quite clear that we would have seen a repeat of the odious debt problems of the 1920s without 1953. It was a crucial agreement, but it is so time-limited. Trying to paint this as analogous to the current situation is so tense. It must be judged at the time, the politics of this period were very different from those of today.

We recommend a full read of his 2011 article to better understand how different those times were and how remarkable the German colony truly was.

Those who argue that this time is different for reasons other than politics might also be right.

When Osborne finally settled the debt on the WWI 5% bond in 2014, the UK could borrow at much lower rates, largely thanks to QE. Debt financing costs have remained extremely low since, making interest charges less onerous.

Others worry that, rather than making things easier, reneging on commitments to central banks (as well as other creditors, such as pension funds) threatens to undermine trust in public institutions. This would create a bigger long-term economic headache because it would mean that, with eroded confidence, the state would find it more expensive to borrow from creditors in the future. Via Tom Clougherty, tax manager at the Center for Policy Studies:

Outright monetary financing is a very powerful genie to let out of the bottle. Assuming central banks ultimately want to normalize monetary policy and shrink their balance sheets, they must maintain a properly functioning government debt market.

More importantly, we remain in the eye of the pandemic. It is impossible to assess what the eventual cost of the economic transition measures taken by governments around the world will be. Or what the new normal will look like.

We’d be fairly confident, however, that the bill will be very large indeed. Every piece of economic data we have seen in recent weeks has signaled that we are dealing with an economic catastrophe of Great Depression proportions. Expect calls for sovereign debt cancellation to only grow.

* There is still much debate over whether the UK actually defaulted or not. Some, like Jim Leaviss of Bond Vigilantes, and Carmen Reinhart and Kenneth Rogoff (see page 114), believe it. Others – see the links posted in the comments – think it is better to talk about restructuring.

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Covid19: Government has R300 million available for rent relief assistance

Government housing in Langa, Cape Town. (Getty)

  • R300million was made available for rental assistance during the nationwide lockdown.
  • Deputy Minister of Human Settlements, Water and Sanitation Pam Tshwete said Covid-19 had disrupted budgets in all departments.
  • The provincial emergency grant was increased from Rand 377 million to Rand 672 million.

The government reallocated R300 million for rent relief assistance to social housing institutions during the nationwide shutdown.

This was revealed on Wednesday by the Department of Human Settlements in a hybrid session of Parliament’s portfolio committee on human settlements, water and sanitation.

The department also presented its adjusted budget for fiscal year 2020/21.

READ | SA facing the double storm of Covid-19 and hunger

Deputy Managing Director Joseph Leshabane said an additional R300 million has been reallocated to provide debt relief to borrowers in the affordable rental housing sector in the form of a grant to National Housing Finance Corporation.

“We have introduced two specific additions to our entity transfers. We are introducing an allocation of R300 million for affordable rent relief and another R300 million for affordable rent relief for tenants who do not stay. in social housing. This is a work in progress, and we will come back to the committee once this framework is finalized, “he said.

Leshabane said more money had been allocated for emergency housing.

“What you will see is the provincial emergency grant which has increased from Rand 377 million to Rand 672 million.

“Again, this is a very important adjustment because for us emergency housing under these circumstances has become quite central in the modernization of informal settlements,” he said.


Leshabane also added that consultations with the National Treasury are ongoing.

“On our schedule, we are on schedule to finalize our consultations, including the Treasury, by the end of this month.

“I say this because we now need to go back and review all the relief measures that are now available for households, UIF and other issues.

“Then we had to reconcile all of that to avoid a double-dipping scenario; it turned out to be much more intense than we had originally planned, but we have the proposal and the project is on the table. There is still work to be done. ,” he said.

READ | Lockdown: Dlamini-Zuma asks SCA for leave to appeal High Court ruling

MEPs also voiced concerns about the reduction of R377 million in the land title restoration grant.

Deputy Minister of Human Settlements, Water and Sanitation Pam Tshwete said Covid-19 had disrupted budgets in all departments.

“We have to do things differently in the future because of Covid-19,” she said. “We take note of the fact that some budget cuts will have a negative impact on us.

“We fully understand that such cuts were made necessary by Covid-19 and we will do what we can with what we have. We spend what we are given.

“We will be monitoring municipalities and provinces, particularly on the issue of title deeds. We know that provinces do not always use this grant.”

The committee also called on the department to speed up the modernization of informal settlements.

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BoT adopts targeted, non-generalized debt relief measures for SMEs

BoT adopts targeted, non-generalized debt relief measures for SMEs

Measures postponed until next June for companies that have not fully recovered

Roong Mallikamas, Deputy Governor for Financial Stability and Corporate Strategy Group, Bank of Thailand.

The Bank of Thailand has put in place targeted debt moratorium measures, which are expected to end next June, for small and medium-sized enterprises (SMEs) with a line of credit of less than 100 million baht and with debts. difficulties in servicing their existing debts.

The targeted measures will end on June 30, 2021. This will only apply to the targeted SMEs that cannot cope with the repayment of loans to financial institutions due to the full non-recovery of business operations.

The central bank implemented large-scale debt relief measures on April 23 to help SMEs recover from the fallout from the pandemic, but the measures were due to end on October 22.

Roong Mallikamas, deputy governor responsible for financial stability and corporate strategy, said the central bank would let banks and non-bank companies negotiate with debtors on whether they can repay their debts normally or whether they prefer to continue. the debt moratorium program for another six months.

Banks and non-bank companies will need to collect information on SMEs for the extended debt moratorium by December of this year.

The value of debtors receiving debt relief measures in the formal banking system stands at 6.89 trillion baht, of which 1.35 trillion baht is allocated to SME loans of 1.05 million accounts.

Of the 1.35 trillion baht, 950 billion baht from 319,000 accounts representing 79% of total SME loans are classified as SME borrowers with contracted debt of less than 100 million baht. Commercial banks and non-bank companies are the creditors of this portion of the SME loan.

Of the 950 billion baht, 57 billion baht or 6% of SME loans from commercial banks and non-bank companies are classified as SME borrowers that banks and non-bank companies were unable to contact. .

The majority of SME borrowers say they intend to service their debts normally when the debt moratorium program expires next Thursday, according to the central bank.

“The Bank of Thailand has asked financial institutions to try to contact the 6% of debtor SMEs,” Ms. Roong said. “They will have more than two months or until the end of December to find them [debtors] and offer the option of a debt moratorium for another six months or to service their debts normally. “

She said financial institutions may also consider adjusting debt service terms for clients on a case-by-case basis to avoid an increase in non-performing loans, as well as adopting other tools such as reduced interest on credit cards and personal loans and the suspension of installments.

Borrowers will be able to resume repaying the full amount when the situation returns to normal, Ms. Roong said.

“The Bank of Thailand has been monitoring the situation closely and expects there will not be many defaults in a very short period of time. [cliff effect] after the end of the debt moratorium program, “she said.” This is because debtor SMEs whose creditors are specialized financial institutions, with loans totaling 400 billion baht, will continue to be under the debt moratorium regime for another six months. The majority of debtor SMEs, which owe a total of 950 billion baht to commercial banks and non-bank companies, also intend to repay their debts. “

The main reason for targeted debt moratorium measures, as opposed to general measures, is to avoid long-term negative repercussions, Roong said.

Debtors still bear the interest charges during the debt moratorium, while targeted measures are a way of discouraging moral hazard, as some debtors, who have not been significantly affected by the crisis, may choose to opt out. seize this opportunity to delay the repayment of the debt.

The longer period of the debt moratorium will also negatively affect financial stability, with an estimated cash loss of baht 200 billion resulting from the suspension of principal and interest repayments, Roong said.

With the relaxed lockdowns, each line of business has resumed operations, albeit at a varying pace.

Companies linked to beverages, agriculture, household appliances and petrochemicals have experienced a good recovery, according to the central bank.

In contrast, tourism-related businesses have recovered slowly from pre-crisis activity.

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Senator Jeff Smith: Time to Act on Student Debt | Column


By Jeff Smith | Democratic Member, Wisconsin Senate

Over the past four months, I have had the honor of participating in the Governor’s Task Force on Student Debt, created by Governor Tony Evers to address the student debt crisis affecting over 700,000 residents. of Wisconsin. Latest Board of Governors Statistics Show Student Debt Level Has Staggered $ 1.7 Trillion; Wisconsin alone has more than $ 24 billion in student loan debt, according to the US Consumer Financial Protection Bureau.

After learning of the extent of the student debt crisis, the task force prepared to develop a strategy on how to bring needed relief to families in Wisconsin. Last month, the task force released its final report to Governor Evers outlining the crisis and providing eight recommendations to help resolve it.

For all the work we’ve done, one thing is clear: the time to act on student debt relief is now. As a state, we must embrace these policy recommendations and resolve this crisis to strengthen Wisconsin’s future.

Amid the COVID-19 pandemic, the task force was able to hold eight virtual meetings. This format allowed us to hear testimonials from current and former students, parents, borrowers, lenders, and officials from other states. Some of the information was familiar to those of us who have navigated the system with our own children; other information highlighted the urgency of addressing this growing threat to our way of life.

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Congress passes coronavirus relief bill with $ 23 billion for agriculture and food

The United States House on Wednesday approved the final version of the $ 1.9 trillion coronavirus relief bill with a margin of 220-211. As expected, the vote went almost entirely across parties, with only one House Democrat voting against and not a single Republican for. The legislation is now heading to the White House, where President Joe Biden has promised to sign it as soon as it reaches his office.

Dubbed the US bailout, the broad package represents a major expansion in pandemic aid and the social safety net. Likewise, it affects almost every corner of the US economy, including much of the agricultural sector. It contains a estimated at $ 23 billion in food and agricultural supplies, including a significant infusion of federal funds to strengthen supply chains and extend nutritional assistance to hungry families.

The main thing related to agriculture, however, is the roughly $ 4 billion that the bill provides for debt relief for black farmers and other groups that have long been the subject of debt. ‘systemic racism in federal agricultural policy. The provision, which has survived repeated attempts by the GOP to remove it during the legislative process, has been championed by a trio of Democrats who recently joined the Senate Committee on Agriculture: Raphael Warnock from Georgia, Cory Booker from New Jersey. and Ben Ray Luján from New Mexico. Last month, Warnock and Booker became just the second and third Black members with seats on the panel.

Under this provision, black, Native, Hispanic and other farmers of color can have up to 120% of their delinquent federal farm loans canceled. (The extra 20 percent goes to offset the federal tax burden associated with such debt relief.) A related provision includes an additional $ 1 billion to help these same farmers with training, education, and other forms of support. aid in the acquisition of land. Included in this second batch of money is funding for a newly created commission on racial equity at the United States Department of Agriculture.

The bill also includes more traditional tariffs. It is spending approximately $ 4 billion to respond to disruptions to the food supply chain caused by the pandemic and to make it more resilient in the future. It also increases the amount of food the government purchases directly from farmers for distribution to food banks and other nonprofits. And it includes money for smaller grants and loans to help businesses buy personal protective equipment, COVID tests and other safety items to protect food workers.

On the nutritional assistance front, the legislation extends last year’s 15% increase in SNAP benefits (i.e. food stamps) until the end of September, while aimed at making it easier to use these benefits for shopping online. Likewise, the bill expands several more targeted food aid programs, including those for women, children, homeless young adults and the elderly. It also has $ 1 billion in nutritional assistance for the US territories.

The focus of the Black Farmer Bill, however, is the most notable agriculture-related development. It comes at a time when Democrats – led by black lawmakers like Booker, Warnock, and new House Agriculture chairman David Scott – are increasingly extending racial justice concerns to the world of agriculture. For too long, they say, Washington’s view of agriculture has been too narrow and too white.

The bill’s specific debt relief provision was based on the Farmers of Color Emergency Relief Act, which was introduced last month by Warnock, and also draws on the article by Booker. more ambitious Justice for Black Farmers Act, which was introduced last year and even earlier this one. Republicans such as Sen. Pat Toomey of Pennsylvania have fought to withdraw debt relief from the stimulus bill, calling it unconstitutional and claiming it is a form of racism in the United States. upside against white farmers.

Supporters, however, point to the long story of black farmers abused by federal farm policy. Among the most insidious abuses suffered by black farmers were the USDA’s long-standing discriminatory lending policies that denied or delayed access to credit, making it virtually impossible for them to compete in an industry long dominated by a government. federal.grow up or go out“ethos.

The share of American farmers who are black has declined dramatically over the past century, from nearly 15 percent in 1920 less than 2 percent today, based on the most recent federal data. The few black farmers who remain, meanwhile, earn a fraction of what their white counterparts do. According to a 2019 analysis According to the liberal Center for American Progress, the average full-time white farmer earned more than seven times as much as the average full-time black farmer in 2017. The situation is unlikely to have become any fairer in the years since followed. Until last October, for example, white farmers received, on average, four times as much federal aid as black farmers in the Trump administration under the USDA’s coronavirus food assistance program. , according to a recent report by the Environmental working group.

Biden has vowed his administration will do better on racial justice, and Agriculture Secretary Tom Vilsack has also said tackling the USDA’s legacy of racism will be one of his top priorities. now that he’s back as head of the agency. Critics, however, are skeptical, given Vilsack’s track record on this front during his first stint in the department under then-President Barack Obama. Among Vilsack’s most damning criticisms came from a multi-part survey published by The counter in 2019, detailing claims his USDA routinely ran out of time for discrimination complaints while also trying to exclude many of those same black farmers. With the latest coronavirus aid program, Democrats have given Vilsack the opportunity to start righting some of these wrongs. Now it’s up to him and the USDA to do it.

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When debt relief does more harm than good

Telegram & Gazette (Worcester, MA)

In a crisis, long-term planning can lose out on quick and dirty solutions, whatever the consequences.

As the pandemic and its economic fallout continue, more cash-strapped consumers could fall into this trap if the Great Recession is any indicator.

A recent report from the Consumer Financial Protection Bureau found that from 2007 to 2010, debt settlements – which can be financially risky – increased. Meanwhile, credit counseling, a debt relief option that keeps consumers in good standing with their creditors, has declined.

Before making a crisis decision, understand how to think about debt relief options.

Why isn’t debt settlement all it’s supposed to be

You’ve probably heard the commercials on the radio or maybe received a robocall promising a debt solution that can reduce what you owe by 50% or more.

Debt settlement demands are as high as the industry’s marketing budget. But these programs aren’t all they’re meant to be – and the ads gloss over the downsides.

With debt settlement, you stop paying creditors and instead direct your money to the debt settlement company, which holds it in an escrow account. Then, usually after several months, the company contacts your creditors and negotiates a deal where the creditor accepts less than was originally owed. That waiting period between when you stop paying creditors and the debt settlement (which is unsecured) is when things can go wrong.

“There is no free lunch,” says Glenn Downing, a certified financial planner in Miami. “There are really important trade-offs with debt settlement. I would try to make this a last resort.”

Debt settlement risks include:

• LEAVE YOURSELF OPEN TO PROSECUTION: When you stop making payments to creditors and debts become unpaid, you can be sued by the original creditor or by a debt collector who buys the debt. Until the debt is settled, whether through full payment, settlement or bankruptcy, you run the risk of being sued.

• BEFORE A TAX INVOICE: The IRS considers any amount of debt settled as taxable income.

• SAVE LESS THAN SAVED: Debt settlement companies often charge around 30% of your original debt balance. So even if you paid 50% of what you originally owed, you won’t come out as far as you might expect after paying the fees to the settlement company. In addition, your debt may continue to increase when you stop making payments, as late fees and interest are added to your balance.

• CREDIT DAMAGE: Missed payments and defaulting on your debts are some of the worst things you can do to your credit. These marks stay on your credit reports for about seven years and will make you appear risky to future creditors, which can prevent you from getting credit or having to pay higher interest rates.

A better choice for long-term financial health

What if there was a way to consolidate multiple credit card payments into one, at a lower interest rate, while still maintaining your good reputation with your creditors?

This is what credit counseling offers from nonprofit credit counseling agencies. These organizations have agreements with many credit card companies that offer a lower interest rate in exchange for regular monthly payments over three to five years to pay off your debt.

But many consumers are unaware of these benefits, according to a 2018 Harris Poll commissioned by Money Management International, a nonprofit credit counseling agency. He found that 62% of 2,012 respondents were unaware that credit counselors can consolidate multiple credit card debts into one payment. And 73% were unaware that credit counselors offer lower interest rates on credit card debt.

Credit counseling has its drawbacks. You usually need a regular income to qualify, and if you miss a payment, the deal can be terminated, leaving you to fend for yourself.

But for the long-term health of your credit profile, credit counseling is clearly the winner. This debt relief tool generally keeps consumers in good standing with creditors as they meet their obligations. The only damage to their credit profile would come from the closure of credit accounts, which some agencies require.

To find a reputable nonprofit credit counseling agency, look for one that has been certified by the National Foundation for Credit Counseling or the Financial Counseling Association of America.

Know when a third option might be best

Before choosing debt settlement or credit counseling, determine if:

• You are barely able to repay your debts regularly.

• Your monthly debt repayments – excluding student loans and housing costs – exceed 40% of your take-home pay.

• Your debt interferes with your quality of life, for example by preventing you from sleeping at night.

If so, you might want to consider bankruptcy. Although it has been stigmatized, this debt relief tool can solve what you owe faster than credit counseling or debt settlement. Plus, credit scores can start to rebound quickly in the months after filing.

This column was provided to The Associated Press by the NerdWallet personal finance website. Related Links: Debt Relief: Understanding Your Options and the Consequences,; National Foundation for Credit Counseling,; Financial Advisory Association of America,


(c) 2020 Telegram & Gazette, Worcester, Mass.

Visit Telegram & Gazette, Worcester, Mass. at

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Dawn Medley Featured on Institutional Debt Cancellation – Today @ Wayne

On September 16 and 17, a team of higher education decision makers from across Ohio will meet to discuss opportunities for their state. As part of this convocation, which is facilitated by the National Governors Association (NGA), the team will explore opportunities to support students with a college degree but without a degree who carry public or institutional debt upon their return to complete their studies. . As they discuss options, the team will hear from some neighbors to the north, including Wayne State University.


“I am delighted to discuss our Returning warrior debt relief program at Wayne State University, where we created a pathway for returning students to graduate by ‘learning’ how to get out of overdue university debt, ”said Wayne State University Associate Vice President of Dawn Medley Enrollment Management. “I am pleased to present alongside Melanie D’Evelyn of the Detroit Regional Chamber. Mélanie directs the Detroit Drives Degree (D3) program, which we are partnering with to enhance the talent pool in our Detroit area. “

In June 2019, the NGA launched the Educate for Opportunities Project focusing on supporting state efforts that link and align their post-secondary institutions with the needs of the state’s workforce and emphasizing adult engagement in educational pathways and training. This project is facilitated by NGA with funding from the Strada Education Network. Ohio is one of six states participating in this project.

Dawn Medley was invited to participate in a roundtable focused on Institutional Debt Cancellation to help Ohio policymakers gain a better understanding of how Wayne State’s program works and how such a program could possibly be put together. implemented in higher education institutions in Ohio, ”said the Ohio Vice Chancellor. Academic Affairs at the Ohio Department of Higher Education, Stephanie Davidson.

from Evelyn

“WSU is a key partner of the Detroit Regional Chamber in its D3 initiative, which is a collaborative effort to increase the post-secondary pass rate to 60% by 2030, while reducing by 50% l education equity gap for the region’s black and minority population. ”Said D’Evelyn. “By leading WSU’s nationally recognized debt relief effort, Dawn’s equity mindset is increasing access to education for the people of Detroit.”

Higher education institutions are the target audience for this panel. The panel will take place at 3 p.m. on September 16. Guests must Register to participate, and registrations will remain open after the start of the panel for those who arrive late and have not registered.

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Africa’s first pandemic default tests new effort to ease China’s debt

A new framework to solve debt crises in developing countries, intended to ensure that Chinese and private creditors share the aid burden, faces a key test after Zambia became the first African country to default during the coronavirus pandemic.

Finance ministers from the Group of 20 major economies said on November 13 that they had finalized a new process to restructure the economy. debts of the poorest countries in the world, who now owes billions of dollars to Chinese public lenders and Western fund managers who bought back their dollar-denominated bonds in the years leading up to the pandemic.

Within this common framework, which G-20 officials hailed as a breakthrough after months of resistance from Beijing, Chinese lenders will participate in debt restructurings alongside rich, mostly Western countries. Private creditors will also be asked to provide relief on similar terms.

This is a big change from previous crises, when Western governments and multilateral lenders such as the World Bank and the International Monetary Fund were the major creditors of developing countries.

Hours after the new debt framework was announced, Zambia, which has borrowed heavily from China, missed a $ 42.5 million interest payment on some of its $ 3 billion denominated bonds in dollars, defaulting one of Africa’s largest copper producers. Zambia has said it needs a break from servicing these obligations to allow it to strike a deal with all of its creditors to bring its debts – now over 100% of gross domestic product – to a sustainable level. and get a bailout from the IMF.

“The framework was designed for the challenges that Zambia is currently facing,” said Eric LeCompte, executive director of Jubilee USA, a non-governmental organization that advocates for debt relief for poor countries.

Zambia has some $ 12 billion in external debt, including $ 3 billion in international bonds and large loans from Chinese public lenders such as the Export-Import Bank of China and the China Development Bank. The government has not said exactly how much it owes Chinese lenders as a whole. Johns Hopkins University’s China-Africa Research Initiative estimates the country has signed some $ 9.7 billion in loans from China, although not all of that money has been withdrawn.

A committee of US and European bondholders who claim to own more than 40% of Zambia’s three dollar-denominated bonds said its members voted against the government’s demand to suspend payments due to lack of transparency on Zambia’s debts and on how the government intends to deal with other creditors, of which China is by far the most important. He also said the government had failed to come up with a credible plan to bring its budget deficits under control.

Mr. Lungu, second from left, and Chinese Ambassador to Zambia Li Jie in a blueberry field in Chongwe, Zambia on November 13.


Martin Mbangweta / Xinhua / Zuma Press

“We have no assurance from Zambia that it will treat the same with its other commercial creditors,” said Kevin Daly, investment manager for emerging markets debt at Aberdeen Asset Management and a member of the committee. .

In an interview with Zambian state television on Sunday, Finance Minister Bwalya Ng’andu said confidentiality agreements prevented him from disclosing the terms of the country’s loans to China. But, he said, the government had presented bondholders with its own confidentiality agreement, which, if signed, would allow it to give them more information about its Chinese loans.

Mr Daly said the bondholders refused to sign the deal because the government failed to provide assurances on all their issues, including the equal treatment of creditors.

In September, Zambia said the Development Bank of China had agreed to defer debt payments until April. But Ng’andu said on Sunday that other Chinese lenders were refusing to sign similar deferral agreements as long as the government was still paying bondholders.

“When I pay [the bondholders], the other creditors are going to put dynamite under my legs and blow my legs up. I left and I can no longer walk, ”he said. “If I don’t pay the bonds my legs will remain intact but I will probably get a bullet in my arm, I will bleed from my arm.”

On Monday, the ministry said its largest Chinese lender, China Exim Bank, had agreed to suspend some $ 110 million in interest and principal payments due between May 1 and December 31 of this year.

Responding to questions from the Wall Street Journal, China’s Foreign Ministry said Beijing participated in an earlier G-20 initiative that allows poor countries to suspend debt payments on bilateral loans until mid -2021, and took note of last week’s decision on the new debt crisis resolution framework. He said China is committed to the equal treatment of all creditors in Zambia and elsewhere, but multilateral lenders and private creditors should also shoulder some of the burden.

Zambia’s default follows those of Ecuador and Argentina, which restructured debt this spring as the pandemic and ensuing lockdowns weighed on the global economy and triggered a sharp drop in emerging market bonds. Lebanon defaulted in early March, days before the World Health Organization declared that the rapidly expanding epidemics of the virus had become a global pandemic.

Since then, bond markets have recovered, mainly due to ultra-low interest rates set by Western central banks. But the World Bank and the IMF have warned that other low- and middle-income countries are likely to struggle to repay their debts in years to come.

“We are not out of the woods,” said Kristalina Georgieva, Managing Director of the IMF, after the announcement of the common debt framework. “This crisis is not over.

Write to Gabriele Steinhauser at [email protected] and Joe Wallace at [email protected]

Copyright © 2021 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Google’s latest advertising policy restricts debt service ads and bans credit repair ads

Advertising for financial services is difficult. The industry has some of the the most expensive keywords on Google Ads (reaching almost $ 50 per click). More so, he has CPC and CPA higher than almost any other industry on Google.

Even beyond these costs, financiers are increasingly familiar with new regulations and policies in their industry on all sides, and Google is no stranger to this either. Google last week announcement an update of these restrictions. Starting in November, it will no longer run ads for credit repair services. At the same time, advertisers who want to run ads for debt settlement or management services will need to be certified by Google, as well as the governing bodies of where they want to run ads.

Although these rules apply to all advertisers worldwide, only certain countries will be able to request certification through Google. These policies affect anyone seeking to serve ads for these terms, whether they provide debt services directly, are lead generators, or connect consumers to third-party services.

Why is Google making this change?

As the increase in debt reaches new heights, so do a myriad of debt relief and credit repair scams. Unfortunately, too often these scams target the most vulnerable or those most in need of help.

Google search ad for tax break

When searchers turn to Google, it is essential that they are protected from scams or services that will only make their problems worse. By introducing new restrictions and certifications for these advertisers, Google hopes to tackle the bad players in the space.

How To Get Certified To Run Google Ads For Debt Management Services?

Ahead of those policies going into effect in November, Google said advertisers could apply for certification in the coming weeks. However, Google will only allow advertisers from certain countries to apply for certification. At launch, Google will allow certified debt management services to serve ads in the following countries:

  • United States
  • UK
  • Australia
  • South Africa
  • South Korea
  • Japan
  • Spain

In addition to these regional restrictions, advertisers must meet other eligibility criteria in their country. For example, in the United States, Google will only allow ads promoting debt services if the advertiser and provider of those services is an approved nonprofit credit and budget counseling agency, such as defined by 11 US Code § 111.

Google policy for the United States

A full list of requirements for each country is available here.

And after?

Google hasn’t released more details, but we’re watching what will happen. WordStream customers who may be affected can, as always, contact their representative with any questions regarding this transition. This post will also be updated once Google’s certification for debt service ads becomes publicly available.

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FTC Settles Charges Against California Debt Relief Companies

The Federal Trade Commission settles charges against a group of California-based debt relief companies after alleging they made false promises to reduce or eliminate student loans in exchange for illegal upfront fees.

The FTC stands ready to settle with three different companies owned by Adam Owens, he announcement On Monday. The companies are called Navloan, Student Loan Assistance Center, and SLAC, also known as Aspyre. They will be permanently banned from the debt relief business under a deal.

The parties involved have agreed to a final order submitted to the United States District Court for the Central District of California. But a judge suspended the action for 60 days due to the COVID-19 outbreak.

If the court concludes the settlement, it will prevent the defendants from offering debt relief services. But it will allow them to help existing clients who fill out forms and submit documents to the Department of Education – if those clients choose to continue working with the companies. In addition, the settlement asks the defendants to turn over approximately $ 470,000 in assets. The remains of a $ 23.9 million judgment would be suspended because defendants are unable to pay more.

The FTC alleged that the defendants charged an upfront fee of $ 699 and a monthly fee of $ 39 while promising to reduce or eliminate student loans. But the cancellation of the loan is not guaranteed to anyone, and customer payments may vary from year to year.

Additionally, the alleged FTC defendants offered gift cards or checks for $ 20 in return for positive reviews on the Better Business Bureau website without disclosure, and that they either falsely advised consumers how. indicate their family size in Ministry of Education application documents or that in some cases they have falsified the family size of consumers without their knowledge.

“These companies promised people that they could get their student loans canceled, which was more than they could offer,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection, in a statement. communicated.

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FTC obtains temporary restraining order against student debt relief company

The Federal Trade Commission has blocked the operations of a group of companies claiming to be affiliated with the US Department of Education, accusing them of promoting student debt relief services but not keeping their promises.

Arete Financial Group and related companies violated the telemarketing sales rule and the FTC law, the FTC said in a complaint filed under seal Nov. 4 in the United States District Court for the Central District of California. Temporary restraining order granted, ending operations falsely promising student loan debt relief, FTC said in a press release Tuesday. The order temporarily prohibits certain business activities, including misrepresenting the facts about loan services, freezes the assets of the defendants and appoints a temporary receiver authorized to take control of the defendant companies.

These actions and “other fair reparations [are] in the public interest, ”said an order signed by US District Judge James V. Selna.

The defendants have been operating “an illegal debt relief program” since at least April 2014, the FTC said in its complaint. The defendants promised to enroll consumers in student loan cancellation, consolidation and repayment programs, promoting programs such as reducing or eliminating monthly loan payments and principal balances, a indicated the agency.

Instead of providing the promised benefits, companies have typically approached borrowers ‘lending departments to forborne or deferral – without consumers’ knowledge or without authorization, the FTC said. The companies have reportedly charged consumers $ 500 to $ 1,800 in upfront fees, as well as a monthly fee of between $ 19 and $ 49, and have collected at least $ 43 million in revenue since the operation began, according to the complaint. the FTC.

“Arete Financial Group charged illegal upfront fees and made false promises to consumers struggling with student loan debt,” Andrew Smith, director of the FTC’s Bureau of Consumer Protection, said in a statement. “To avoid such scams, consumers should never prepay a company promising to provide debt relief.”

The companies claimed to be affiliated with the Department of Education in telemarketing calls as well as in radio, television and online advertisements, the FTC said.

Arete and its affiliates reportedly “get consumers to sign a power of attorney form” when signing up for services, then changed consumers’ login names and passwords on the Federal Aid website. students. The companies also changed consumer email addresses registered with loan services, according to the FTC’s complaint. Thereafter, consumers would not receive correspondence and would not have access to their own loan information.

“Consumers often find out that they have been scammed only after talking to their loan officer and realizing that the defendants have not made any payments to the agent, while pocketing the consumers’ payments for themselves,” says the complaint. “When consumers ask for their refund, defendants often refuse to issue full refunds and will only issue a partial refund or no refund at all.”

The defendants have reportedly revealed that they were in fact not affiliated with the Department of Education amid dense text in service agreements, according to the FTC complaint. Consumers have often been unable to process the disclosure because they were rushed through the process of signing the forms, he said.

Arete did not respond to a request for comment sent to its general messaging and legal department on Tuesday afternoon.

The complete list of corporate defendants is as follows: American Financial Support Services Inc .; Arete Financial Group (also doing business as Arete Financial Freedom); Arete Financial Group LLC; CBC Conglomerate LLC (also doing business as; Diamond Choice Inc. (also doing business as Interest Rate Solutions); J&L Enterprise LLC (also doing business as Premier Solutions Servicing); La Casa Bonita Investments Inc. (formerly known as La Casa Bonita Investments LLC, also doing business as Education Loan Network and Edunet); and US Financial Freedom Center Inc. The individual defendants are Carey Howe, Anna Howe, Shunmin “Mike” Hsu, Ruddy Palacios (also known as Ruddy Barahona), Oliver Pomazi and Jay Singh. The lawsuit also names MJ Wealth Solutions, LLC, as a defendant for damages.

Tuesday’s temporary restraining order comes more than four years after the Office of Consumer Financial Protection wrote to several search engine companies asking them to help prevent student debt relief scams targeting borrowers. It occurs about two years after the FTC and states begin trying to crack down on student debt relief programs. The FTC has won settlements in its efforts, including a 2018 order approved by a judge which included a $ 11.7 million monetary judgment against the Los Angeles-based Student Debt Relief Group. At the time, that company would not have the funds to pay the bulk of the judgment and had to hand over almost all of its available assets, worth more than $ 2.3 million.

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California suffers the deadliest day yet; Governor Newsom Offers Debt Relief – CBS San Francisco

SACRAMENTO (CBS SF) – Gov. Gavin Newsom confirmed on Thursday that California suffered the highest number of deaths in a single day from the COVID-19 emergency, while also announcing two new measures that would provide severe debt relief for Californians financially affected by the pandemic.

On Thursday afternoon, Newsom made the grim announcement that Wednesday marked the deadliest day for COVID-19 patients with 115 additional confirmed deaths. The state’s death toll is now 1,469, and public health officials have confirmed 37,369 cases statewide.

READ MORE: CDC panel recommends Pfizer COVID vaccine for children ages 5 to 11


The new deaths were an 8.5% increase from the previous day.

On the bright side, Newsom said that for the first time, hospitalizations and intensive care cases were down, with hospital admissions falling 4.4% and intensive care cases 1.2%. The state now has 3,343 coronavirus patients in hospital and 1,204 in intensive care.

The governor opened Thursday’s COVID-19 response briefing focusing on the debt and financial support offered in stimulus payments. Newsom said 21 companies that handle student loans will give a 90-day grace period on payments with no late fees.

Newsom credited Illinois Governor JB Pritzker for leading efforts to support borrowers who were not covered by debt forbearance in the $ 2.2 trillion federal aid law, relief and economic security (CARES) against coronaviruses. Pritzker on Tuesday announced a similar order for residents on private and non-federal student loans.

The deal with these companies will provide 1.1 million Californians with student loan debt with a breach of those obligations.

Newsom also said it signed an executive order prohibiting debt collectors from seizing stimulus payments from funds. The order will also be retroactive, requiring debt collectors to return any money that had been seized from previous stimulus payments.

However, Newsom noted that the decree would not protect those who must keep children or spousal support.

READ MORE: COVID vaccine: CoCo County prepares to rapidly distribute vaccines for 5-11 year olds

Newsom also confirmed that 16 doctors are leaving the state to provide care in New York City, where the coronavirus continues to be concentrated. He praised UCSF, hailing the school for sending 20 doctors and nurses to New York offer help earlier this month.

“One of the great advantages of these doctors going to the front lines in New York is what they will bring back, which is a deep understanding and knowledge of what is happening at the most acute point of the disease. crisis in this country, and bring that to bear here in the state of California, ”Newsom said.

The governor thanked residents of the state who had joined the Californians For All initiative announced earlier this week. A total of 22,000 people signed up to the website on the first day of its launch.

Briefly referring to the planned increase in testing that had been the focus of Wednesday’s update, Newsom referred to a conversation with President Trump and confirmed that 90,000 promised test swabs were arriving in California for distribution on Friday with 10,000 additional swabs still awaited. Swabs are needed to administer any of the types of coronavirus tests.

Newsom also warned residents of the state that with the weather forecast indicating another hot and sunny weekend, now is not the time to rebel against the stay home order.

“Look, we’re entering a very hot weekend, the nicest weekend as far as warm weather you like, since January, or probably since last summer in the state of California. And that means that people tend to want to go to beaches, parks, playgrounds and hike, “Newsom said.” And I predict there will be a significant increase in volume. But I also think that s ‘there are, and people don’t practice physical distancing, I’ll be announcing in a week or so that those numbers are going to go up. I don’t think anyone wants to hear that.

“As this disease continues to spread, we must continue to be vigilant,” he concluded.

Raw video: Governor Gavin Newsom comments on maintaining social distancing and shelter-in-place orders

NO MORE NEWS: Supply Chain Issues: How Global Shortages Affect Consumers Nationally

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New York doctor fights coronavirus and student debt

A nurse receives help putting on her personal protective equipment before providing care to a Covid-19 patient at the Sharp Chula Vista Medical Center in Chula Vista, Calif., April 10, 2020.

Photo: Marcus Yam / Los Angeles Times via Getty Images

These last weeks, healthcare workers have been touted as heroes in the national response to the coronavirus pandemic. Wartime analogies circulate freely: UN Secretary-General António Guterres has called the Covid-19 pandemic the most difficult global crisis since World War II. In a recent press briefing, New York Governor Andrew Cuomo made calls to “support our troops”, referring to healthcare workers as “the soldiers in this fight”.

In many ways, the comparison is relevant. Doctors, nurses and support staff find themselves in a war against a virus that has infected thousands and killed hundreds of their colleagues around the world. Public expressions of support for health professionals are significant. But they are also insufficient to quell the deafening silence on Capitol Hill in response to growing calls for relief measures – foremost among them the cancellation of educational debt.

Each Covid-19 patient admitted to hospital will be cared for by a team of professionals who, theoretically, have over $ 1 million in combined student debt.

I am a doctor and, unsurprisingly, have a large student loan. You can’t become a doctor in America without paying for years of graduate school, so I started my medical career with over $ 200,000 in student debt – the mean for graduates of medical schools. In the United States, the average salary for new doctors in training is about $ 57,000 per year. After four years of residency and about $ 20,000 in loan repayments later, I’m still scratching the interest. I owe more than when I graduated.

Now, as a resident in psychiatry in the national epicenter of this crisis, I am responsible for responding to mental health emergencies, including for patients positive for Covid-19. When I am not in the hospital, I will provide outpatient coverage for colleagues called to work shifts in emergency rooms and intensive care units. Many interns in junior psychiatry have already been “redeployed” to internal medicine teams overwhelmed by the tidal wave of Covid-19 patients. We are extended far beyond our initial job description. Even so, compared to my nursing, ER and intensive care colleagues, it’s easy.

Among the indebted health workers, young doctors are not alone. Almost 70 percent of all nurses – who are the real front line in this pandemic – training graduate with $ 40,000 to $ 150,000 in debt. My sister, a family medicine nurse practitioner who oversees the clinic at her local homeless shelter, has dutifully paid the interest on nursing school loans for 10 years without making a dent in the capital. Now she reuses the same paper gown every day to examine patients with symptoms of Covid-19. The average debt of a graduate student is about $ 30,000 – on par with the average annual salary of certified drug technicians, paramedics and ambulance crew members.

Imagine: Every Covid-19 patient admitted to hospital will be cared for by a team of professionals who, theoretically, have over $ 1 million in student debt combined. So of course you can call us heroes. But we would prefer debt relief.

Critics will say that an economic crisis is not the time to talk about student debt reform. Some see in such a reform the fact of placing a excessive load on US taxpayers. Others will remind us that we signed up for these jobs and, hey, at least we have jobs. But, in the age of Covid-19, the reality facing healthcare workers is more akin to a military deployment than a day’s work. We are now talking about front lines, redeployments, isolation zones, tours of duty. For many, these are no longer the jobs we signed up for, but they require skills that we have taken on debt to acquire.

A lot has been made of shortage personal protective equipment that plagues our country during this crisis. This shortage has already cost and will continue to cost healthcare workers their health and, for many, their lives. From concierge staff to respiratory therapists to treating physicians, we are filling the gaps in a system that is not designed for a global pandemic. And when the dust settles, many will have to rebuild their health while dealing with the very real trauma of working amidst an onslaught of sick, dying and grieving patients and their families.

Covid-19 healthcare veterans deserve better than the six-month suspension of loan repayments for all borrowers as part of the recently passed stimulus. Certainly we deserve better than the public service loan forgiveness program, for which many of us do not qualify and which – having rejected 99% of all applicants in 2018 – has been called “fundamentally broken” by the very government officials hired to manage it. If healthcare workers were to do our job as badly as the Department of Education handles student loans, patients would die at an alarming rate.

And yet, with impressive reliability, healthcare workers rise to the occasion, demonstrating their commitment to the ethics of the field. I am proud to be part of this community, proud to have skills that alleviate the suffering of patients. So what is a reasonable way for our government to repay this burden?

A look at the GI Bills of WWII can be instructive. Those GI invoices included immediate financial rewards for almost all veterans. Additional benefits included low cost mortgages, dedicated loans, dedicated unemployment compensation, and tuition allowances. The benefits were provided to all active veterinarians for at least 90 days within an allocated time period.

Like all systems of wealth, knowledge and power, the American health care system has its own discourse. What is said out loud works alongside what is silent. The word “hero” carries a loaded story. It originally referred to a person – a man, often of semi-divine origin – who displayed superhuman strength. Champion Heroes chat through thick and thin, sacrificing their well-being to the pursuit. Healthcare workers have been given the Herculean task of tackling Covid-19.

But we live in the real world, where we juggle this task with the same demands as any American: child care, mortgages, health insurance, rent, student loan repayment, etc. When nurses are called in soldiers and invited to war, we should ask ourselves what is being overlooked. When Education Secretary Betsy DeVos Rejects Student Loan Plans forgiveness as “crazy”, we should ask who serves their language. And when Congress speaks on behalf of business, while remaining silent on an issue affecting 42 million graduates in debt, we should hear that silence out loud.

Speak, Uncle Sam. Support the troops.

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Students demand debt relief after for-profit college collapse, while leaders admit no wrongdoing

As a young high school graduate, Joseph Schettler dreamed of working for the FBI or becoming a forensic psychologist. He took steps to make those dreams come true.

Schettler became the first person in his family to attend college, enrolling in ITT Tech’s criminal justice program in 2006 with the school’s confidence that he would surely find a job in his field. Two years later, Schettler earned an associate’s degree. But he soon realized that the time and money he had devoted to his studies had not brought him closer to a job.

When Schettler tried to transfer to a nearby public college, he accepted very little of his credits. “I had to start all over again,” said Schettler, now 30, reflecting on that time. “I felt like I was losing $ 60,000.”

Several years later, ITT went bankrupt under the weight of accusations by state attorneys general and federal regulators that the school had misled students and investors. Now two of its top executives appear to be moving away from at least some of the relatively unscrupulous allegations.

ITT Managing Director Kevin Modany agreed to pay $ 200,000 to settle a lawsuit with the Securities and Exchange Commission over allegations the school misled investors about the impact of two failed student loan programs on company results. The company’s chief financial officer, Daniel Fitzpatrick, will pay $ 100,000. The executives’ settlement with the SEC follows an agreement ITT reached with the agency. Lawyers for Modany and Fitzpatrick did not immediately respond to messages seeking comment.

In the last three full years of ITT’s existence, Modany has earned over $ 1 million per year in total compensation, according to a lawsuit filed by the company’s bankruptcy trustee. Shortly after ITT filed for bankruptcy, Modany brought forward a claim, asking for more than $ 5 million in deferred compensation as part of the process. (In a lawsuit filed earlier this year, the trustee overseeing ITT’s bankruptcy asked the judge to dismiss that claim.)

John Grisham: “reckoning day” arrives for student debt

Meanwhile, Schettler wakes up before 7 a.m. six days a week in his Michigan home and heads to his job which has nothing to do with his initial dream of working in criminal justice. He also does his military service. In total, Schettler said he earns less than $ 80,000 per year. He said his time at ITT and the years that followed took its toll. “I have no motivation or ambition to go to school,” he said. “I sell cars now for a living. “

The contrast in fates between ITT alumni like Schettler and the company’s senior executives is “unbelievably grotesque,” said Toby Merrill, director of the Harvard Law School’s Predatory Lending Project. At the same time that students face unreliable bankruptcy debt that they cannot get rid of by declaring bankruptcy and being told to take their degrees off their resumes when looking for a job, “the shell of the business is dischargeable in the event of bankruptcy and the debt is gone, ”she said.

And executives “are being told they can just walk away,” added Merrill, who represents former ITT students in the bankruptcy process.

Thousands of students demand debt relief

Schettler is one of thousands of former ITT students hoping to get debt relief through the process. Earlier this year, the trustee overseeing ITT’s bankruptcy urged the judge in the case to agree to a $ 1.5 billion settlement with a class of former students. Once the deal is finalized, students would be in line with other creditors to access the money left over after ITT’s bankruptcy case is closed. It would also write off nearly $ 600 million in money that ITT said students owed the school.

But the agreement does not address the bulk of student debt, which is held by the federal government because many students have taken out federal student loans. Even with the deal, “students will not be any closer to an outcome that could reasonably be described as fair in a bankruptcy context until that debt is gone,” Merrill said.

Former ITT students may have difficulty obtaining debt relief in other ways. The Education Department is rewriting a rule that relieves federal student loan borrowers when they have been misled by their schools. The rule, known as the borrower’s defense against repayment, has been in place since the 1990s, but was rarely used until 2015, when thousands of borrowers began claiming relief in the midst of the collapse of the large for-profit university chains.

After pressure from activists, the Obama administration drafted regulations to create a process for borrowers seeking relief and a system for officials to assess their claims. Now the ministry, under DeVos, is looking to change that system, including offering only partial relief to some borrowers who say they have been misled.

Schettler, who is married with two children, knows his debt is unlikely to be completely wiped out, but he hopes for some relief. “I am here beating my head to support my family and this debt over there is not helping,” he said. As for ITT and its officials, it feels like they are “getting away with it” without enough punishment.

“They wanted to make money, they wanted to get rich and they didn’t care how people were hurting,” he said.

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There is no shortcut to debt relief – so don’t believe the hype

The office further said the company broke a second law – the Consumer Financial Protection Act – when it billed debtors without settling their debts. The agency alleged that Freedom charges fees – sometimes thousands of dollars – even when borrowers themselves negotiate settlements with their creditors.

Further, the bureau alleges that the company has kept from its customers the fact that several major banks have an ongoing policy of never working with a debt settlement company.

Freedom also asked consumers negotiating their own settlements to “expressly mislead” their creditors when asked if they were enrolled in a debt settlement program, the office alleged.

In response to the settlement, Freedom said it was working with the office to resolve issues raised in the lawsuit.

“In resolving the case, we have agreed to make some changes to our disclosures and policies to improve our program, many of which were implemented when the case was first filed,” Freedom said in a statement. communicated.

This is how debt settlement or debt relief service programs typically work: the company promises to work on your behalf, claiming they are better able to negotiate a deal to reduce your unsecured debt. , like what you might owe on a credit card.

Consumers are often told to stop communicating with their creditors. As a general rule, clients are also advised to stop any payment they might make and put the money in a bank account with the intention that the debt settlement company will offer creditors a lump sum offer lower than that. which is due.

One of the biggest problems with debt settlement programs is that they can encourage consumers who manage to keep up with their payments to default on their debts. Debtors who are already in default are told that they must also make payments to a bank account so that they too can accumulate enough money to make a lump sum offer to settle their debts cheaply.

This strategy makes sense on paper. Creditors or the collection companies they hire can spend a lot of time trying to get what is owed to them. So, they may be willing to accept a lump sum.

But for those who are desperate to get out of a financial hole, working with a debt settlement company can make matters worse. When you stop paying your creditors under a debt settlement plan, you risk triggering penalties, higher interest rates, and other fees. So, while you wait – sometimes for years – to see if debts can be paid off for less than you owe, your debt burden may increase. Ultimately, as was the case with some Freedom clients, many creditors may refuse to negotiate with debt settlement companies and take legal action against you.

Debt settlement doesn’t come cheap either.

The Consumer Financial Protection Bureau said Freedom’s fees typically range between 18 and 25 percent of the debt amount. This means that you have to weigh the fees you pay with the growth in your debt, as this could outweigh any savings you might make. Additionally, many people fail to make payments to make up a lump sum offer.

“Debt settlement and similar programs offered by companies like Freedom often do more harm than good and turn out to be a waste of money,” Andrew Pizor, lawyer for the National Consumer Law Center, said in a statement. . “Consumers should speak directly to their creditors and conduct their own debt settlement negotiations, or they should speak to a qualified consumer bankruptcy lawyer. “

Overall, the debt settlement industry has been plagued for decades by shady practices and blatant scams that benefit consumers struggling with their debt load, said Robert Lawless, Max L. Rowe at the University of Illinois College of Law.

“People have to be very careful when choosing a debt relief provider,” Lawless said.

If you want low cost debt relief, I suggest you get help from a nonprofit credit counseling agency. To find a local agency, go to the National Foundation for Credit Counseling website – The agency can help you set up a debt repayment plan for a relatively low monthly fee.

There is no shortcut to debt relief. So don’t believe the hype.

Michelle Singletary can be reached at michelle.singletary

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Pakistani government expects about $ 300 million in debt relief from France

Just days after Pakistani Prime Minister Imran Khan denounced French President Emmanuel Macron for his remarks against Islamist extremism and hundreds and thousands of Pakistanis marched through the streets to demand nuclear weapons from France, Islamabad expects debt relief from France worth hundreds of millions of dollars from France.

According to a report By The Express Tribune, Pakistan had qualified for the G-20 relief initiative announced in April this year for the period May-December 2020 to tackle the financial impact of the pandemic, alongside 76 poor African countries. The relief was conditional on each country making a formal request. Over the past seven months, Pakistan, which is going through a catastrophic currency crisis and whose total debt in August stood at $ 25.4 billion, has been able to secure around $ 800 million in debt freeze deals from 14 of the G-20 countries, including France.

According to official documents, Pakistan has not yet finalized the terms of debt rescheduling with Japan, Russia, Saudi Arabia, the United Arab Emirates and the United Kingdom. Pakistan apparently did not reimburse these countries, on the understanding that these members would eventually sign the agreements in accordance with the G-20 agenda.

Pakistan’s Ministry of Economic Affairs estimated that it was eligible for a total of $ 1.8 billion in temporary debt relief for members of the G-20 countries for the period May-December 2020, which included 1, $ 47 billion in loan repayments and $ 323 million in loan interest. Among these, they were able to sign agreements to defer the repayment of loans amounting to 800 million dollars to 14 nations.

The ministry estimates that Pakistan can receive $ 613 million in temporary debt relief from Saudi Arabia, $ 309 million from China, $ 23 million from Canada, $ 183 million from France, $ 99 million from Germany, $ 6 million from Italy, $ 373 million from Japan, $ 47 million from South Korea, $ 14 million from Russia, $ 1 million from UK and $ 128 million of United States dollars.

Pakistan expects France to grant debt relief of $ 183 million and $ 104 million in two phases

As the threat of COVID-19 comes back with vengeance and begins to affect countries again, the G-20 countries have decided to extend the debt relief initiative for another six months (January-June) 2021. Pakistan’s Economic Coordination Committee on Friday approved approval to make another formal request to the G-20 countries for an extension of the debt relief initiative for an additional six months.

With the G-20 extending the relief, the Ministry of Economic Affairs expects Pakistan to receive relief of $ 915 million for the extended 6-month period. This includes $ 385 million from China, $ 211 million from Japan, $ 104 million from France, $ 53.6 million from Germany, $ 65 million from US $ 12 million from Saudi Arabia. , $ 7 million from Russia and $ 0.5 million from the United Arab Emirates.

So Pakistan expects debt rescheduling relief worth $ 183 million from France for the first eight-month period of Mya-December, it estimates $ 104 million relief for the extended term of six months from January to June 2021. Therefore, France’s total relief estimate is US $ 287 million for the entire 14-month period.

So far, Pakistani authorities have concluded 27 debt rescheduling agreements with around 16 countries, according to the Ministry of Economic Affairs.

The France-Pakistan relationship in free fall

The Pakistani government is openly raging against France and in particular French President Emmanuel Macron after his denunciation of radical Islam following the macabre beheading of a French teacher by an Islamist terrorist.

Macron spoke out against the extremism engendered by radical Islam and stressed the need to develop an “Enlightenment Islam”. At the same time, the French authorities launched a campaign of repression against certain mosques and expelled people they considered to be involved in extremist activities in France.

This elicited a harsh reaction from Pakistani Prime Minister Imran Khan, who appeared to justify the beheading of Mr Paty during his speech at the UNGA. Imran Khan had also criticized Macron’s “leadership”.

However, Khan didn’t stop there. With the aim of appearing as the leader of the Muslim Ummah, Pakistani Prime Minister Imran Khan intensified his attack on Western countries, in particular against France, by issuing a statement in which he made a clarion call to Muslim world leaders to take note of the “growing Islamophobia” in non-Muslim states. The Pakistani National Assembly had voted a resolution calling for the withdrawal of its ambassador to France, forgetting that for the moment, Pakistan did not have an ambassador in Paris.

The Pakistani Senate also passed a resolution against France, and calls for a boycott of French products have been made by both politicians and Pakistani citizens.

Pakistani citizens called on Prime Minister Imran Khan to throw nuclear weapons at France and impose a blanket ban on French products

Even as Imran Khan continued to criticize Emmanuel Macron, Pakistani social media users urged their Prime Minister to launch a “nuclear attack” against France. Social media platforms in Pakistan were teeming with messages asking Imran Khan to bomb France and their compatriots to boycott all French products.

France too had responded in its own way, refusing to modernize Pakistan’s Mirage fighter jets and submarines. Recently Pakistani Human Rights Minister Shireen Mazari shared a questionable report on Twitter saying, “Macron is doing to Muslims what the Nazis did to Jews. The French Embassy in Pakistan called her lies that the claim she made on Twitter was nothing more than “false news and false accusations.” The French foreign ministry had asked the Pakistani authorities to withdraw the insulting remarks of the Pakistani minister against Macron. The tweet was then deleted.

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CFPB Settles With Freedom Debt Relief | Bradley Arant Boult Cummings LLP

On July 9, 2019, the United States District Court for the Northern District of California issued a final judgment stipulated and order in file 17-cv-06484, Consumer Financial Protection Bureau c. Freedom Debt Relief, LLC, et al. Under the stipulated judgment, Freedom Debt Relief, LLC (Freedom Debt Relief is not related to Freedom Mortgage Company) is prohibited from engaging in deceptive behavior and charging fees for non-settlement resolutions with consumers regarding the debts that the company has agreed to negotiate. Freedom Debt Relief is also required to provide certain information regarding negotiations with creditors and consumers’ right to settlement funds upon withdrawal from the debt relief program. The company is required to pay the Consumer Financial Protection Bureau (CFPB) $ 20 million for restitution and submit to the CFPB a comprehensive repair and compliance plan identifying affected consumers and otherwise complying with the stipulated judgment. Finally, Freedom Debt Relief is required to pay a civil fine of $ 5 million, of which $ 439,500 is to be paid to the FDIC under a different consent order.

On November 8, 2017, the CFPB filed an action against Freedom Debt Relief and Andrew Housser, co-founder and co-CEO of the company. The CFPB has filed its first amended complaint on June 1, 2018. According to the complaint, Freedom Debt Relief provided consumer debt relief through a debt settlement program in which consumers deposited funds into an FDIC-insured bank, and the company negotiated with consumers’ creditors to settle their debts. The CFPB alleged that Freedom Debt Relief failed to notify consumers that if they opt out of debt settlement programs, they will get their deposits back, less any fees incurred. Notably, Freedom Debt Relief allegedly distorted the fees charged to consumers. In addition, while the company would have known that some creditors would not negotiate consumers’ debts, it nonetheless indicated to consumers that all creditors would negotiate. Additionally, Freedom Debt Relief allegedly encouraged consumers to distort its involvement in their accounts when consumers negotiated directly with creditors.

In the first amended complaint, the CFPB pleaded five counts of alleged violations of the Consumer Financial Protection Act of 2010 (CFPA) and the Telemarketing Sales Rule (TSR). Specifically, the CFPB alleged breaches of the CFPA for (i) misleading consumers about creditors’ willingness to negotiate freely; (ii) mislead consumers about charges; (iii) unduly force consumers to negotiate themselves; as well as violations of the CFPA and TSR for (iv) failure to clearly and conspicuously disclose consumer rights to funds; and (v) charge a fee in the absence of a settlement. Without admitting or denying the CFPB’s allegations, other than the facts necessary to establish the tribunal’s jurisdiction, Freedom Debt Relief and Andrew Housser agreed to a final judgment stipulated on July 9, 2019.

To take with:

Settlements with the CFPB have historically tended to include injunctions against the continuation of the illegal activities of defendants and monitoring or reporting to ensure compliance. While Freedom Debt Relief’s stipulated judgment provides for a similar remedy, it also includes a hefty fine of $ 20 million for restitution, as well as a civil penalty of $ 5 million. Looking ahead, we can probably expect future settlements under the leadership of Kathy Kraninger to include similar provisions.

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Haverford’s student loan debt payment

As we begin the new year, it is a good time to consider some initiatives in higher education that deserve more attention and wider adoption. Colleges have recently introduced creative policies in areas such as financial aid, college programs, and student success. This month, I plan to highlight a few of those efforts in the hope that they will be seen as models for testing in other institutions. The first is the Haverford College student loan repayment program.

Haverford College introduced a new financial aid program, which pays the first year of loan obligations for students in its class of 2019. According to report by Inside higher education (IHE), under the new program, 12 Haverford graduates (out of a total of 318) will be the first to receive debt relief, ranging from $ 900 to $ 1,500 each. They will also be able to request two additional years of loan repayment.

Here is the institutional context of the Haverford initiative. It follows earlier college decisions to 1) waive the promise that its students would not have to take out loans to pay for their education and 2) end its unnecessarily admissions policy and admit a small number of students in part according to their abilities. to pay.

The college still promises students from families earning less than $ 60,000 a year that they won’t have to take out loans to pay for their education. Those who earn more may need to take out loans, but they should still be less than what is allowed within federal limits. According to IHE, Haverford borrowers average about $ 13,600 in loans.

The end of the no-loan policy went into effect for first-year students enrolling in 2015, expecting to graduate in 2019. In the breach came Steven M. Jaharis, a board member of Haverford administration, whose family foundation donated $ 2 million to endow a fund that would help pay off graduate debt.

Cited in IHE, Jaharis said, “Everyone on the board was disappointed when we couldn’t maintain the no-loan policy. I felt we needed to let the students know that we care about this issue and that it is a big deal.

Haverford’s reimbursement program has several requirements.

  • Recipients must be eligible for financial assistance based on need.
  • They may not have access to other loan deferral options, and they must be unemployed or on a “low income trajectory due to choice of occupation”.
  • The new endowment will cover loan payments only up to the amount a student could borrow under Haverford’s financial aid policies. In other words, repayments are capped – if students borrow more than what the college recommends, they won’t be covered for the “excess” amount.

The Haverford program could become a form of financial aid to emulate for other institutions, albeit with adjustments tailored to the unique circumstances encountered in specific schools. As the most obvious example of the importance of the institutional context, the average debt of Haverford graduates in 2019 was just under $ 14,000, less than half the obligation of the typical bachelor who takes out student loans.

However, the benefits of the program are manifold.

  • Loan repayments are only made for graduate students, thus providing – unlike scholarships – a strong incentive for college completion;
  • Annual reimbursement amounts can be funded from small endowments, making program subscription accessible to more donors;
  • Limiting repayments is a useful constraint for students who borrow more than they need to cover their studies;
  • The criteria are of particular benefit to students who wish to enter occupations which may not be highly remunerative but which serve an important public interest.
  • The possibility of extending loan repayments for a second and third year is part of a process of permanent contact between the alumni and the college.

It remains to be seen to what extent other institutions will adopt the Haverford model, but the idea has several clear merits as a complement, if not a substitute, for institutional support. This is another example of how even relatively small amounts of aid can make a big difference when based on financial need and available at the right time.

Then, in Part 2, the University of Rhode Island faces budget cuts by investing heavily in student success.

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Prime Minister Imran calls on world for debt relief in Covid-19 war – Pakistan

ISLAMABAD: Prime Minister Imran Khan once again called on leaders of rich countries, the UN Secretary General and heads of financial institutions to give debt relief to developing countries like Pakistan so that they can better fight against Covid-19.

In a video message to the international community broadcast on Sunday by TV channels, the Prime Minister highlighted the difficulties faced by developing countries, especially those who are heavily indebted, in dealing with the situation and said that the biggest challenge for the nations of the developing world was to save their people from pandemic death and hunger due to the prolonged lockdowns triggered by the disease.

Referring to the enormous aid announced by the American, German and Japanese governments in their countries to deal with the situation, the Prime Minister said that the maximum “we can afford is $ 8 billion”.

PM says Pakistan has no money to spend on already overburdened health services

“This is the problem with most of the countries in the developing world suffering from very high debt-to-GDP ratios, so the problem in these heavily indebted countries is that they are now facing a lack of fiscal space.” Mr. Khan said, adding: “We don’t have the money to spend on already overburdened health services, and second, to prevent people from starving to death.

“Therefore, I call on world leaders, the UN Secretary General (Antonio Guterres) and heads of financial institutions, to launch an initiative, an initiative that will provide debt relief to developing countries to fight against the coronavirus, ”he said.

Pakistan’s total debt and liabilities at the end of December last year stood at around Rs 41 trillion, or nearly 94% of the country’s GDP.

In his opening remarks, Prime Minister Khan compared the difference in approaches of developed and developing countries in tackling the pandemic.

“As the global response to the crisis unfolds, we are seeing two different responses,” he said, adding that developed countries have adopted a policy to focus first on containing the crisis. virus through blockages, and then on the management of the economic impact.

“In the developing world, in addition to containing the virus and dealing with the economic crisis, our biggest concern now is saving people from starving to death. The dilemma on the one hand is to save people from Covid-19 and on the other to prevent them from starving to death due to prolonged lockdowns, ”the prime minister said.

On top of that, Khan pointed out, there was a huge difference in the resources available to developing countries and the developed world, stating that the United States had already proposed a $ 2.2 billion relief plan. dollars for its citizens, Germany with a 1tr euro emergency plan and Japan with 1tr.

“To give an example of Pakistan with a population of over 220 million, so far the maximum stimulus we could afford is $ 8 billion, and that’s the problem with most countries. developing, ”he said.

The Prime Minister has already created a Coronavirus Relief Fund account and called on people to make generous donations to help the government fight the pandemic and provide rations and relief to people living under the biting lockdown for almost a month.

Last month, in an interview with a foreign news agency, the Prime Minister expressed fears that Covid-19 could devastate the economies of developing countries.

He had urged the richest countries in the world to cancel the debt of the poorest countries and called for the lifting of sanctions against Iran.

“My concern is poverty and hunger,” Khan remarked, declaring that “the world community needs to think of some kind of debt cancellation for countries like us, which are very vulnerable because of the the less it will help us deal with pandemic.

“It’s not just Pakistan. I imagine the same situation in India, in the subcontinent or in African countries, “he said.

Posted in Dawn, April 13, 2020

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Doctors in debt: these doctors gladly reached an agreement with California

Dr Michael Gabriel Galvez, a pediatric hand surgeon who mainly treats low-income people the patients in a central california hospital, jokes with families he went to “30th year”.

But it hasn’t been cheap. The debt he has accumulated over 18 years of graduate school and medical training, including Stanford Medical School, scholarships, and residency, is approximately $ 250,000. (And that doesn’t include credit card debt.)

Almost all of her student loan debt is set to be written off over the next five years thanks to CalHealthCares, a new public program intended to avoid an impending shortage of health professionals, especially those willing to treat beneficiaries of Medi-Cal, the state version of Medicaid for low-income people.

“We know it’s a big deal that students are taking large sums of money in the form of loans,” said Dr Galvez, 36. “Even for doctors, it’s a big burden they have to take on.

Across the country, escalating costs for medical schools have pushed young physicians away from lower-paying specialties, such as pediatrics and psychiatry, as well as medical professionals. rural jobs or less wealthy regions.

The shortage of primary care physicians is particularly acute in California, which is experiencing a growing number of Aging of the population and the country largest Medicaid population – and one of the lowest state reimbursement rates for physicians in the country. California is expected to have a deficit of 4,700 primary care clinicians by 2025, according to a University of California, San Francisco 2017 Report.

The new program aims to change this by using revenue from Proposition 56, which imposed a tax on tobacco products, to help doctors reimburse their ready. It will disburse a total of $ 340 million. To be eligible, physicians, who receive up to $ 300,000 each in debt relief, must agree to spend one-third of their time with Medi-Cal patients over the next five years. As part of the first round of financing, announced this month, 247 physicians will receive $ 58.6 million and 40 dentists will receive $ 10.5 million in debt relief.

NOTat the start, 1,300 suppliers applied for the prices, accordionng at the Department of Health Services. Program administrators said they assessed applicants based on their personal statements, work history and specialization, among other factors. Applications for the next round of awards will be accepted in January.

Dr Rishi Manchanda, who was part a commission who put forward a 10-year, $ 3 billion plan to address the shortage of doctors in California, called the reimbursement program a “big step in the right direction” that would immediately dispatch clinicians to serve these populations. But more needs to be done, he said, to strengthen the pipeline of physicians practicing in the state.

Among the commission’s recommendations: increase enrollment in state medical schools, increase physician reimbursement rates, give nurse practitioners greater authority in the physician’s office, and move towards “Value-based” payment systems, which reward providers based on their performance.

Some of these measures would require action by lawmakers, who also face criticism that gave the alert on the cost of the Medi-Cal program, which has grown significantly under the Affordable Care Act. Today, more than 13 million Californians – nearly a third of the state – depend on it for their health care, more than half of all children, the commission report notes.

>> Read more from The Upshot: It’s easy to forget, but a student loan cancellation program already exists

The loan repayment plan is notable because it provides more generous funding to more doctors than similar programs, said Janet M. Coffman, professor of health policy at the University of California at San Francisco. Doctors will be required to regularly submit documents prove that they meet the requirements of the program.

American Medical Association president Dr. Patrice A. Harris said in a statement that loan cancellation programs help increase diversity in the medical profession by removing financial barriers.

Dr Galvez, who grew up in the Bay Area without health insurance, relied on his parents to help support his wife and two children through surgical scholarships.

“This has been a constant struggle just to get by, ”he said.

We have spoken to other doctors about the impact of California’s debt repayment program.

Dr Molly Dorfman, 39
Pediatric intensive care specialist
Total debt: $ 320,000

Dr Dorfman, 39, said at one point she was paying $ 4,500 per month on a single loan, or 30% of his take-home pay.

She cares for the most critically ill patients and directs their transport to Valley Children’s Hospital in Madera, the only independent pediatric hospital between Los Angeles and San Francisco that primarily treats Medi-Cal patients.

Most loan cancellation programs focus on primary care, she said, making it harder for sub-specialists like her to find help.

“As a single woman, I had no way of taking a purely academic job and owning a house,” she said.

The grant lifted “an emotional burden,” she said, adding, “I can focus on my patients.”

Dr Camila Susana Cribb Fabersunne, 31 years old
Total debt: $ 76,000

“I have always viewed medicine as my tool for social justice,” said Dr. Cribb Fabersunne, who grew up in an impoverished farming community.

“Forgiveness allows me to not have to weigh the impact between following my work of heart and life and the impact on my family,” she said.

Her husband, who will be an intern resident for the next four years, also plans to serve the Medicaid community, she said. The couple recently had their first child.

Dr. Jasmin Marie-Hatcher Brown, 30
Total debt: $ 256,556

For years, the decisions Dr. Brown and her husband, a dentist, made about where to live and what to buy revolved around their student loans.

Debt cancellation is “something out of a dream,” she said. “Now we are able to give back to charities,” she added, as did the scholarship foundation that supported her throughout her academic and medical studies.

This week, Dr. Brown began working at an outpatient pediatric clinic in Coachella.

Dr Marc Anthony Bernardo, 33 years old
Total debt: Over $ 500,000

Dr. Bernardo graduated from dental school in May. He is the son of two dentists and works three days a week in his family’s private practice in Southern California. He also does mobile dentistry with bedridden and special needs patients twice a week.

He recently married a doctor, who himself has a lot of debt. The couple had considered leaving the state for a place where the cost of living and reimbursement rates are higher. But now, thanks to the debt cancellation, they will be able to stay in California for the foreseeable future and start thinking about buying a house and starting a family.

“I am just beyond gratitude,” he said.

Dr David Benavidez, 40 years old
Child psychiatrist Total debt: $ 340,000

Dr Benavidez, who grew up in poverty and moved constantly, wanted working with communities marginalized because of their own experiences. But the economics were hard to justify with loan repayments due each month.

After years of accumulating debt as he enrolled in college and medical school, he finally sat down this year to sort out his finances. At the time, he was working with low-income patients on a scholarship in Alabama. The exercise was disheartening.

“Burnout is very real,” he said. “And part of the problem is you come to that crossroads where this idea of ​​wanting to be helpful now meets with appropriate compensation.”

He stumbled across CalHealthCares online and applied. Without such a program, he said, he would not have considered Go back to california, where he had moved when he was 16. He was put off by high taxes and the cost of living.

He started working this week at a community clinic linked to the University of California at San Francisco.

“It’s life changing,” he said.

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Weighing the pros and cons of student loan debt relief – Orange County Register

More than 37 million current and past American students, and 8 million of their parents, now owe $ 1.5 trillion in student loans, the highest amount in history.

The average debt of almost $ 40,000 per student has a serious impact on the lives of these students and recent graduates. For those who do not qualify for the civil service loan cancellation program (because their loan is from a private lender or because they do not work in the public service), payment of interest and principal of this debt affects the type of job they take after college.

Lecturers (and many guidance counselors) encourage students to follow their passion – but that’s not possible if a student’s passion doesn’t pay off well; and once made, a career path decision is not always a way to go back. Decisions to marry and start a family are also often delayed, until the college graduate can see positive numbers on their personal record.

Politically, this concern is powerful. Most Democratic presidential candidates advocate some form of forgiveness of college student loans. The 45 million American voters who repay student loans make up a large one-question voting block. It’s hard to see how a Democratic presidential candidate can win the nomination without the support of such a large interest group.

We’ve seen this in presidential politics before: most powerfully when farmers pressured to reduce the real value of their debts by abandoning the gold standard and thus inflating the dollar. On this platform for debt relief, Democrats appointed William Jennings Bryan as President in 1896, 1900, and 1908.

How much would the current version of debt relief cost? The federal government currently charges 5 percent on student debt. If a homeowner took out a 5% mortgage to pay off $ 150,000 over 30 years, he would pay $ 9,660 per year. So, suppose the government would add $ 97 billion a year to carry $ 1.5 trillion in new debt. If the government took over all student debt, but still required students to pay something – say 1% – the annual budget impact would be $ 86 billion. If the government never really expected to pay back the amount, but only the annual interest, then at 5% it would come down to “only” $ 75 billion per year, and if the student paid 1% for 30 years, the remaining 4% annual interest that the government would forgo would amount to $ 60 billion each year.

A much bigger prospect is for the government to make university free for each of the 20 million students (using a low estimate of average tuition fees, including public and private universities). This would add $ 440 billion to our annual deficit. Senator Bernie Sanders, I-Vermont, offers zero tuition fees for students from families earning less than $ 125,000. He estimates the cost at $ 47 billion per year. Accepting his figure and the estimate of the loan cancellation at 1%, the package amounts to just over $ 100 billion per year. As huge as that number is; it is within reach of a debate on priorities in a budget that already spends $ 4.4 trillion.

William Jennings Bryan advocated debt relief to avoid crucifying farmers on a “golden cross”. As a targeted electoral policy, student loans are the “cross of debt” or our time.

But is student debt relief the best use of our tax dollars?

Bachelor degrees do not have the same value. From an adulthood perspective, many college graduates a few years later wish they had majored in a different field than the one they had chosen in their late teens.

From an equity perspective, university graduates are more affluent than the average in American society. They voluntarily chose to take on the debt. If America has $ 100 billion more to spend each year on higher education, giving it directly to community colleges to retrain unemployed high-tech Americans would show more economic sense and compassion; although he might not win the election so easily.

Tom Campbell has been a teacher for 36 years. He currently teaches economics and law at Chapman University and was also a professor at Stanford and Berkeley. He has also served as a California State Senator, United States Congressman, and California Chief Financial Officer. He left the Republican Party in 2016 and is now a registered independent.

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ANALYSIS: Are the IMF and the World Bank responsible for Africa’s external debt burden?

As the continent weighs in the economic havoc caused by the Covid-19 pandemic, there has been increasing regional calls for debt relief, more recently through African Union President Cyril Ramaphosa on Africa Day on May 25, 2020.

Why many African countries flare up in debt? They can blame international lenders according to Dr Arikana Chihombori-Quao, former AU Ambassador to the United States.

“[The] IMF, World Bank, all the other institutions. They make African countries jump through hoops. Loans that we will never be able to pay, ”she told an American broadcaster. Voice of America in a broad interview in April 2020.

“The United States, when they borrow money, get it at 1.5, 1.9[%] interest rate. Africans, when they get the same amount of money, they pay 9, 10%. People who don’t need a break, they have a break, those who need a break, they don’t have a break ”.

Chihombori-Quao stepped down in October 2019. The AU took the unusual step of deny it had pushed her away because she was too frank.

But does Africa borrow internationally at rates five times higher than other countries? We have examined this claim.

Loan terms based on country income status

Africa Check contacted Chihombori-Quao to get evidence of her claim and ask what other institutions she was talking about. We will update this report with his response.

We asked Dr Charles Adjasi, professor of development finance to Stellenbosch University School of Business in South Africa, on how African countries are borrowing International Monetary Fund and the world Bank.

A country that accesses a typical World Bank loan “will access it based on its income status and the corresponding interest rate,” Adjasi said.

Income status indicates whether the country borrows from two of the banks five units. These are:

Most African countries are only eligible for loans from the IDA, the World Bank told Africa Check. These are low-income countries and “get very concessional financing in the form of loans without subsidies and without interest rates that charge only 0.75% service fees”.

Since April 2020, 68 countries were only eligible for IBRD loans and 14 of these were in Africa. 59 other countries qualified only for IDA loans, including 33 Africans. Of 17 “mixed” countries, which could borrow from both units, six belonged to the region.

Interest rates below 9-10%

The loans currently given by the World Bank and the IMF do not have an interest rate of 9 to 10%, Adjasi told Africa Check. They are anchored to the “Libor”, the London Interbank Offered Rate, a benchmark lending rate largely used in the international bank.

Adjasi told Africa Check that loans from international lenders generally attract an interest rate of Libor plus “+/- 0.5%”.

“The Libor is about 0.4 to 0.9%”, which would give a rate of 0.9 to 1.4%. “So 9 to 10% is definitely too high for the interest rates. This is even higher than lending rates in some developing countries and defeats the purpose of IBRD, IDA or IMF facilities, ”he said.

An IMF spokesperson told Africa Check that it was impossible to know which loans the former ambassador was describing because her comments were in “very general terms”.

However, “the bulk of our loans to low-income countries are set at 0% or on concessional terms”.

The United States cannot borrow from the World Bank

Chihombori-Quao referred to the United States borrowing money at lower rates. But the world Bank and IMF The websites show that the country currently has no loans from either lender. The World Bank spokesman said developed economies like the United States were not eligible to borrow.

Adjasi told Africa Check that a high-income country like the United States is not eligible and technically cannot borrow from the World Bank. However, it can borrow in international capital markets.

Higher interest rates in the 1980s

Until the end of fiscal 2018, IBRD loans to eligible members did not vary based on individual country circumstances, the World Bank said. Members were “subject to the same pricing, regardless of their region of origin and depending on the market conditions prevailing at the time of issuance of the loans.”

The bank said it currently offers a flexible loan, the IBRD flexible loan, which takes into account the financing or debt repayment needs of a country.

Have African countries in the past taken out loans at interest rates of up to 10%?

According to historical data on IBRD loans, a number of countries, including Nigeria, Republic of Congo, Ivory Coast and Zimbabwe has always taken out loans with interest rates of up to 12%, especially in the 1980s.

A rate query on the IMF website shows that adjusted royalty rates, which are drawn on outstanding loans, were 9% or more around 1990.

These rates were in line with prevailing interest rates, as Libor was a factor in interest rates, Adjasi told Africa Check.

“So from this perspective, it’s clear that facilities during times of high Libor will attract higher rates for everyone, including African countries.”

“Graduate”, “reverse graduate” countries between IDA and IBRD

A number of African countries which had progressed or “graduates” from IDA to IBRD are now back in IDA, a process called “reverse graduation”. These are Nigeria, Côte d’Ivoire, Republic of Congo, Cameroon and Zimbabwe. Egypt returned to IDA in 1991, but switched to IBRD again in 1999.

The bank has in the past given a number of reasons why IBRD countries returned to IDA status. These include “sharp swings in commodity prices coupled with exuberant excessive borrowing during the boom years” and “an abundance of commercial bank lending in the 1980s”.

The bank notes that “with hindsight”, there was also “an overly optimistic view of the macroeconomic prospects of many developing countries” leading them to become “over-indebted”.

It is possible that African countries that have reverted to IDA status may still owe IBRD loans, although some that have not paid have benefited from debt relief, Adjasi said.

“The main challenge here is that an unsustainable debt profile, or high debt burden, can revert a middle-income country to low-income status. “

The conclusion that African countries have been singled out has not been substantiated as the IBRD and IDA awards affect all eligible countries, Adjasi said.

“So in the case where the rates are 9-10%, that will apply to everyone. We also have no evidence to suggest that [higher income] Organisation for Economic Co-operation and Development countries receive facilities at lower interest rates.

Countries have “loan portfolios,” says development studies expert

Dr Morten Jerven is professor of development studies to Norwegian University of Life Sciences and wrote books on economic development statistics in Africa.

It is not easy to directly judge whether the assertion of the envoy is correct or not, he told Africa Check.

“The quote is imprecise because it does not claim that IMF and World Bank loans are specifically 9-10%,” Jerven said, echoing the World Bank and IMF.

“Countries have a loan portfolio. It is very possible that one country has one IMF loan at a concessional rate and another at a higher than market rate, ”Jerven said. The same country could also “borrow in private markets, such as Treasury bonds, where rates could be higher again.”

Was a former emissary barking the wrong tree?

Dr. Misheck Mutize, who teaches finance at the University of Cape Town Business School, told Africa Check that it was “unlikely that African countries would be taxed more in a discriminatory manner.” The “claims and statements of the former ambassador have a political context and dimension”.

As loans from multilateral institutions were low and on concessional terms, their interest rates were not the problem, Mutize said. His search for interests including credit ratings, financial markets and African economic policy.

Rather, it was “the conditions that accompany multilateral loans”. He said it could include austerity measures and structural adjustment programs, which include cutting public spending, cutting social assistance and cutting the public wage bill. He also noted the increase in commercial loan rates to contain inflation and currency devaluation.

As loans must be repaid in foreign currencies, their cost increases when local currencies lose value, Mutize said. “This is another huge cost source, and the net cost of devalued currency could be much higher than free market interest rates,” he said. To escape lending requirements, African countries have started borrowing in the Eurobond market, where interest rates differ from country to country due to credit ratings.

“African countries pay more because they have bad credit scores or a high risk of default,” Mutize said.

All these factors therefore make Africa’s indebtedness more complicated than the interest claims made by Chihombori-Quao.

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Are millennials responsible for their own student debt?

As a father of 25 and 17 year old sons, I love Millennials and Gen Z. But it is increasingly difficult to feel sympathy for children born between 1981 and 2012 (to give Where to take).

It is not all – or perhaps even above all – their fault. Much of the problem stems from the way the media covers the plight of young Americans, particularly the allegedly catastrophic amount of student debt they incurred just to get a college degree which is now, we are told, a almost insignificant paper which no longer “automatically” guarantees admission into the “middle class”. A recent story in The Wall Street Journal illustrates this approach. It’s titled “Playing catch-up in the game of life: millennials approach the Middle Ages in crisis” and promises “New data shows they are worse off financially than any previous living generation and may never get over it.” Most of the time, it highlights individuals and couples who have tons of student debt and as a result cannot buy a house, have children, or even get married.

In fact, it is far from clear that the raw economy is driving, say, the reduction in fertility rates, which have been declining for decades all over the world and are linked to the increase in fertility. female autonomy. And despite all the talk about generational poverty, it’s not immediately clear that all is darkness. According to a 2018 Pew study, millennial households are now “correspond to the highest household income for their age group. Add in higher rates of higher education, and the future actually looks bright. And it seems the millennials Maybe better in different ways that Gen X was at the same stage of life.

Either way, there is so much wrong with the student debt narrative that it’s hard to know where to start. First, more people, including more low income people, go to college like never before, and graduates have much higher lifetime incomes and much lower unemployment rates than people with just a high school diploma, associate’s degree, or a few years of university. Like economist Scott Winship wrote, “If we count growing student debt on the debt side of the ledger, shouldn’t we count the value of the debt-financed asset (human capital) on the asset side?” And despite the total student debt of $ 1.5 trillion, the average and median amounts owed by students are barely mind-boggling.

According to data from Lending Tree, for example, around 70% of the class of 2018 took out loans; their the median monthly payment was $ 222. The average loan amount (which will be higher than the median) for graduates with debt was around $ 30,000. According to Pew:

The median borrower with unpaid student loan debt for their own education owed $ 17,000 in 2016. The amount owed varies widely, however. A quarter of borrowers with unpaid debt reported owing $ 7,000 or less, while another quarter owed $ 43,000 or more.

Most borrowers therefore act responsibly. College graduates earn about 80% more than high school graduates, so going into debt isn’t stupid. And even though the university has become more expensive, the salary premium remains high enough that the number of years it takes to recoup the price of the university has not increased for decades, according to work done by the New York Federal Reserve:

It is extremely difficult to get straight answers on many aspects of education debt. Often it is not clear whether the debt for a given year includes loans for graduate studies, including law school or medical school, which are not only much more expensive but also much more profitable and optional. Ninety percent of law school graduates borrow, for example, and the average debt load is $ 127,000 for students in private schools and $ 88,000 for those in public schools. Three quarters of medical students take out loans of around $ 200,000 on average, but the typical doctor earns between $ 150,000 and $ 312,000 per year, so the debt is not particularly difficult to pay off. Should we feel bad for lawyers and doctors?

Obviously, it’s best to graduate from college with little or no debt. But media accounts inevitably revolve around people with mind-boggling debts that are nobody’s fault other than their own. Worse yet, reports rarely contain detailed information that would give the reader a better idea of ​​an individual’s life choices. Yes, relatively cheap loans undoubtedly induce some people to go to college who would not if they had to pay higher interest rates (if student loans were dischargeable as part of a procedure). bankruptcy, interest rates – even those offered by the federal government, which pays about 90 percent student loan dollars – would be much higher). But at the end of the day, the borrower must take responsibility for their actions. I say this as someone who paid for their undergraduate and graduate education and sweated blood every time I signed up for a student loan. Youth is a time of great madness, yes, but you know exactly how much you’re going to pay back for exactly how long.

In The Wall Street Journal story we meet a 32 year old woman living in Chicago who “is a single tenant and earns $ 75,000 per year [working for the city]. She also owes $ 102,000 in student loans and $ 10,000 in credit card debt. His salary is actually quite good, especially for someone his age. Median household income for Chicago is about $ 53,000 and the median per capita income is $ 33,000. She has thrice average student debt, but we have no way of knowing where it went in college or if there’s a college degree in there.

Earning $ 75,000 per year comes down to $ 6,250 per month. Suppose she pays 33% of total taxes, which brings her monthly take-home pay to around $ 4,200. Assuming she pays 7% of her loans, she has to pay about $ 1,200 per month, which leaves her $ 3,000 to cover rent, food and everything else. It’s not great, but it is doable. In real dollars, that’s about $ 20,000 more than I took home in the mid-90s when I started trading. Raison and lived in Los Angeles with a spouse who was not working and a 1 year old son. Does she have roommates? Why did she spend so much on college? Reading this story reminded me of last year Time cover story on teachers who should have done two or three extra jobs because they are “not paid for the work [they] to do. Much of household finances are tied to spending levels, which are never really discussed.

We also meet a couple in their thirties who “run a financial advice website, reducing their combined student debt by $ 377,000.” What? One of them is a lawyer, so let’s assume that up to $ 127,000 in debt was spent on getting a law degree from a private school. there is still a quarter of a million dollars of student debt to be taken into account. The story does not provide any mitigating circumstances and, to be honest, I can’t imagine any that would explain such a situation other than through some really silly choices. Should we as a society be prepared to forgive such mistakes through universal debt relief programs offered by politicians such as Sens. Elizabeth Warren (D-Mass.) And Bernie Sanders (I-Vt.)? It seems like an insult and an outrage to everyone, parents and students, who scrimped and saved up and went to schools they could afford.

In a Associated press article About Robert F. Smith, the billionaire who just announced he would pay off all student debt for the 2019 class of Morehouse College, we meet a 22-year-old finance student with an inexplicably and shocking amount of student debt – $ 200,000, an amount that would take him 25 years to pay “at half of his monthly salary, according to his calculations.” When Smith made his promise at the start of Morehouse, the student cried.

“I don’t have to live on peanut butter and jelly sandwiches. I was shocked. My heart sank. We all cried. Instantly it was like a burden had been lifted off. . “

I’m sure not the only one wondering how the hell someone – a finance student, of all people – ended up $ 200,000 in hock by graduation. Morehouse’s full list price is nearly $ 50,000 per year, but the the average net price is $ 32,000 once grants and scholarships are factored in. Even if he gave loans over the four years, it should be $ 128,000, not $ 200,000. Specifically, who would do such a thing? The average net price nearby State of Georgia costs $ 15,000. Borrowing $ 200,000 for a bachelor’s degree is simply inexplicable.

I have written many times about how young Americans are indeed fucked by my own generation, the Baby Boomers. Old age rights are a brutal form of war of generations which systematically steal from the relatively young and poor to give to the objectively old and rich. The 2008 financial crisis begged the young people again, who also grew up in a century with below average economic growth (thanks, persistent deficit spending and massive national debt).

Seniors in America have a lot to explain, and we need to reform all kinds of policies that slow economic growth and direct all kinds of unearned wealth to people who don’t need it. But young Americans – at least those who manage to wreck their finances royally on graduation day – must also be held accountable.

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Zimbabwe: Responsibility for the Debt Management Strategy

The new waiver makes progress towards debt management which analysts say is a step in the right direction towards improving transparency and accountability.

Public debt remains a controversial issue in the country due to its negative effects on economic growth as well as its impact on the delivery of social services.

In addition, ordinary citizens bear the burden in terms of high taxes and other austerity measures designed to ensure unsustainable debt service.

Between 2014 and 2019, the country’s debt was mainly driven by arrears. External arrears fell from US $ 109 million in 1999 to US $ 6.4 billion in 2019.

However, the deputy director of the public debt management office of the Ministry of Finance and Economic Development, Mr. Joseph Medzano, said that the current administration of President Mnangagwa is working to introduce transparency, including the publication of the first Debt Bulletin of 2018, which was released in March of this year. .

“We are making a consistent policy of issuing a debt bulletin and we started with the 2018 one when the current administration took over.

“We recognize the shortcomings in this regard, but we will soon have another one for 2019 when we prepare the national budget. We have also restructured the RBZ debt and halted ZAMCO debt acquisitions,” he said. said yesterday in Bulawayo at a three-day annual multi-stakeholder meeting in Zimbabwe. Debt conference organized by the African Forum and Network on Debt and Development (AFRODAD) and the Zimbabwe Coalition on Debt and Development (ZIMCODD).

Mr. Medzano added that the engagement efforts were also a way to settle the debt, with some token payments having been made to the International Monetary Fund.

During the period 2010 and 2019, Zimbabwe took out $ 3,202 billion in loans. The fuel and power sectors accounted for US $ 1,697 billion, of which US $ 250 million was a guarantee issued by the government in 2018 to finance the office differential between the purchase price of commodities by consumers. importers and sellers.

Compensation for former commercial farmers is now expected to increase external debt by US $ 3.5 billion.

Afrodad’s senior policy analyst Tirivanhu Mutazu said the release of the 2018 debt bulletin, for example, was laudable in promoting transparency and accountability.

“The efforts to increase domestic resource mobilization are also a step in the right direction in debt management,” he said.

He argued, however, that securing natural resources was in bad taste as it would affect future generations who would be deprived of the resources.

Other stakeholders at the conference agreed that there was still room to improve the transparency and accountability of the country’s debt.

Mr. Mutazu added that over the years, the government has adopted a series of debt resolution strategies, including re-engaging the international community and negotiating a comprehensive package of arrears clearance and debt relief. .

These strategies include the Zimbabwe Fast Track Arrears, Debt and Development (ZAADS) Strategy of 2012 and the Lima Strategy of 2015.

“There is also a parliamentary committee on the foreign affairs portfolio, which complements the government’s re-engagement efforts,” he said.

The conference takes place under the theme “Strengthening transparency and accountability in public debt management for sustainable development”.

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Will the G20 step up debt relief for the poorest countries? | Business and Economy

The G20 is set to discuss going beyond the initial debt relief efforts agreed to in April as the pandemic continues to ravage poor economies.

The Group of 20 major economies this weekend may have to consider expanding aid to the world’s poorest countries, three months after agreeing to provide temporary debt relief amid the coronavirus pandemic continues to ravage the nations.

G-20 central bankers and finance ministers will hold a virtual meeting on Saturday to discuss and coordinate phased efforts to spur a global economic recovery. Looking beyond debt relief efforts would be part of it.

The Covid-19 pandemic is now spreading faster in the Americas and Africa compared to the previous meeting in April, when the bulk of infections were in Asia and Europe. The rate of infections is rising in many countries, with the cost of debt outweighing health and social spending.

Unprecedented stimulus measures from the world’s largest central banks have helped most emerging markets regain access to international capital markets, but some smaller economies that typically do not benefit from large-scale borrowing will still need help.

“The focus on debt is important, but we shouldn’t focus on it to the exclusion of everything else,” said Anna Gelpern, professor of law at Georgetown University, at a conference July 9. “The goal must be essential funding. needs in response to a public health shock. How to get there is a second-rate question.

Since the April G-20 agreement that aims to waive around $ 12 billion in bilateral debt payments from countries particularly vulnerable to the pandemic, 41 of 73 eligible countries have asked for help. The Paris Club waived $ 1.3 billion in repayments and the International Monetary Fund made $ 100 billion in emergency funding available for low-income and emerging countries.

Middle income countries

However, charities, including Oxfam, have said that the aid given to the world’s poorest countries so far is “woefully insufficient”. Saturday’s talks could focus on extending the debt break beyond 2020 and adding middle-income countries, said Eric LeCompte of Jubilee USA Network, a non-profit group that advocates for the debt relief for small economies.

France’s main priorities for the meeting will be to extend the moratorium on the debt service of the poorest countries until 2021 and to encourage international negotiations for digital and minimum taxation, the finance minister said. Bruno Le Maire. Discussion of a new allocation of special drawing rights to the IMF will likely remain on the table, according to a finance ministry official.

A proposal to increase these reserve assets, which would increase the IMF’s lending power, was blocked by the United States at the lender’s meeting in April. However, the governor of China’s central bank on Thursday called on the IMF to use a new issuance of SDRs to help developing countries.

In a letter to G-20 finance ministers released on Friday, a group of economists including former US Treasury Secretary Larry Summers and Vera Songwe, executive secretary of the United Nations Economic Commission for Africa, urged the meeting to extend the debt moratorium and consider new SDR allocations. Summers is a Bloomberg News contributor.

“It will take more than a six-month suspension of debt service on existing bilateral debts to help the poorest countries finance the necessary fiscal and health response,” said Brad Setser, senior researcher at the Council on Foreign Relations and former economist in the US Treasury Department. “We also need more financial flows. “

Private creditors have so far backed away from efforts to stop payments on Eurobonds as countries feared triggering default clauses.

Another sticking point is China, which has been slow to join the debt suspension initiative. The participation of the world’s second largest economy is essential for the debt cancellation campaign to work, World Bank President David Malpass said last week.

“The persistent lack of clarity on which Chinese creditors will participate, coupled with the resistance of private sector creditors to voluntary participation suggest that the actual relief will be far less than originally expected,” Alicia Garcia Herrero, Chief Economist for Asia-Pacific at Natixis SA, says in a note.

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Funding for adaptation at the confluence of the climate crisis, Covid-19 and over-indebtedness

Covid-19 has hit every country in the world, rich and poor alike, but low income countries (LICs) are the hardest hit, and half of them are at high risk or are already in debt. Although in April this year, G20 finance ministers approved a Debt Service Suspension Initiative (DSSI) to provide temporary relief to LICs to help manage the impact of the pandemic, the adoption to date seems limited. The DSSI covers only part of the total debt of LICs. Private sector lenders have largely refused to come forward, undermining government efforts.

On the other hand, climatic disasters are increasing both in frequency and severity. The first line victims are the LICs, with very little adaptability. So far, the mitigation ambition of the main emitters is very low compared to the temperature targets set in the Paris Agreement. The Climate Action Tracker’s “thermometer” predicts a temperature rise of up to 4.1 degrees Celsius by 2100, unless dramatic climate action is taken. Even if this happens, the IPCC 1.5 degree Celsius report made it clear that massive climate damage to lives and livelihoods in LICs is to be expected. This makes the need for adaptation investments immediate and urgent.

However, adaptation funding is extremely poor, despite the commitments made by donors. As the private sector is not very interested in adaptation in LICs due to the ineffectiveness of market instruments and adaptation actions being mostly public goods, international public finance is the best possible source. adaptation. These countries received preferential treatment for support in the Paris Agreement. It should be remembered that the provision of climate finance is a legal obligation for developed countries, under both the Convention and the Paris Agreement, and Article 7.4 has recognized that adaptation is a global responsibility. Faced with this, adaptation financing representing less than 10 billion dollars per year is below, by order of magnitude, the needs of 140 to 300 billion dollars per year by 2030. Despite the promises of a balanced allocation, adaptation finance is less than 20 percent of total climate finance. LIC citizens receive an average of US $ 3 per person per year, or less than a cent per day, according to Oxfam.

The Global Commission on Adaptation (GCA) advocated for investments in adaptation and resilience, finding that benefit-cost ratios of interventions ranged from 2: 1 to 10: 1. However, the private sector’s contribution to adaptation still represents only a meager 3% of their total climate finance, and goes mainly to mitigation. Clearly, there are barriers to investing in climate resilience, including a lack of awareness of its benefits and capacity constraints. The GCA underscored the need to rapidly scale up adaptation finance through international and national sources.

According to the United Nations Conference on Trade and Development, repaying the external public debt of developing countries will cost between $ 2.6 billion and $ 3.4 trillion in 2020 and 2021 alone. ‘amounts to over six billion dollars a year. However, Bangladesh only receives support in the hundreds of millions, compared to domestic investments of more than $ 3 billion per year in adaptation. Clearly, without adequate liquidity support and major debt relief, the global economy, especially LICs, cannot return to pre-pandemic growth levels without risking severe climatic distress and social unrest. In light of these concerns, the G20 called on the IMF “to explore additional tools that could meet the needs of its members as the crisis unfolds, drawing on relevant experiences from previous crises.”

Faced with the persistent poverty of adaptation finance, it is necessary to seek alternative sources. One of those instruments worth considering is a “climate debt swap” option. The global community has had experience with “debt-for-nature swaps” (DNS) since the late 1980s and 1990s in developing countries, where debt relief was linked to investments in reforestation, biodiversity and the protection of indigenous peoples. In Bangladesh, we have the experience of the Arannyak Foundation, established in 2003 under the US Tropical Forest Conservation Act, where part of the debt owed to the United States was converted into local currency for investments in nature conservation. Overall, this instrument could not have much impact on debt reduction due to its very small scale. For example, the share of DNS-derived debt relief by some creditors is tiny, barely 0.3% of total climate finance in 2012. Since then, it has not increased much.

While there is global agreement that adaptation finance is new and additional and largely based on grants for LICs, the question of whether debt for adaptation trade (DAS) can be considered as such is controversial. These debates aside, in this time of global financial crisis, DAS may be an option for the global climate community to explore.

It is argued that, when properly designed and implemented, DAS can be a win-win option for both creditors and debtors. However, it depends on many conditions on both sides. Making DAS a viable and sustainable option requires relatively large amounts of public debt to have an impact on debt reduction. In view of its acceptance, the management modalities, including budget support or via the creation of a dedicated fund, could be decided later.

The International Institute for Environment and Development (IIED) in London, in a recent study, argues that climate and nature debt swaps offer a way to restructure debt while promoting pro-poor growth and debt sustainability. IIED proposes to establish a global expert group to better understand these exchanges.

Another potential source is also being explored to boost adaptation finance. In 2019, the Climate Bonds Initiative (CBI) launched the Climate Resilience Principles, which inspired the issuance of the first bond dedicated to climate resilience by the European Bank for Reconstruction and Development in September 2019, highlighting an opportunity for the creation of a new market for such instruments. But given the experience of the private Green Climate Fund facility and the World Bank’s International Development Association, successful blended finance models are still rare. Debt instruments such as green bonds, including climate resilience bonds, may not be universally applicable or viable in all markets. However, faced with a very limited budgetary space, they can in certain cases offer an essential lever for private financing in the short and medium term for the objectives of resilience.

These questions will likely be raised at the next annual meetings of the World Bank and the IMF on October 12-18. Obviously, the Bangladesh delegation to these meetings should be aware of these issues to share their thoughtful interventions, in alliance with like-minded nations.

Mizan R Khan is Deputy Director of the International Center for Climate Change and Development (ICCCAD) at the Independent University of Bangladesh and Program Director at LDC Universities Consortium on Climate Change (LUCCC).

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The G20 should call on private lenders to suspend debt repayments during a pandemic; China provides $ 2.1 billion in debt relief to poor countries; Religious leaders provide recommendations to the G20

Devex: Religious leaders present recommendations to G-20
“An international group of religious leaders and advocates this week presented a series of recommendations to Saudi Arabia, which chairs the G-20, ahead of the group’s high-level summit with world leaders which begins on November 20. The G20 Interfaith Forum brings together religious leaders and religious institutions from around the world to provide recommendations to heads of state on a multitude of development topics. Initially formed to tackle global economic problems, the G-20 has been pressed to address broader international challenges such as climate change and gender equality… ”(Welsh, 19/11).

The Guardian: “People are suffering”: G20 calls on private lenders to suspend debt repayment
“… Governments in the developing world are struggling to adjust to widespread financial losses from Covid-19, made worse by debt repayment to private creditors. The grouping of the biggest economies, the G20, is meeting in Saudi Arabia this weekend, and will urge private lending institutions to halt debt repayment, ideally to allow more spending to fight the pandemic … ”(Michaelson , 20/11).

Reuters: China says it has given $ 2.1 billion in debt relief to poor countries
China has provided debt relief to developing countries of a combined value of $ 2.1 billion under the G20, the highest among the group in terms of the amount deferred, the G20 said on Friday. Minister of Finance of the country, Liu Kun… ”(20/11).

The KFF Daily Global Health Policy Report summarized news and information on global health policy from hundreds of sources, from May 2009 to December 2020. All summaries are archived and available through search.

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World Bank chief calls for greater private sector buy-in for G-20 debt relief

The Group of 20 major economies’ debt relief initiative for the world’s poorest countries has progressed well, but further debt relief and greater involvement of private sector creditors is needed, the chairman of the government said on Monday. the World Bank, David Malpass.

Malpass told Reuters in an interview that 35 of the 73 eligible countries are participating in the G-20 debt relief initiative, which will freeze official bilateral debt service payments until the end of the year. , and others have expressed interest.

The G-20 Debt Service Suspension Initiative (DSSI) will free up $ 12 billion in funds that countries can use to deal with health and economic strains caused by the coronavirus, according to a new database from the World Bank.

Malpass said the pandemic had clearly caused a “very serious and lasting setback” to the global economy that was particularly hitting the poorest countries.

Debt relief agreed by G-20 members and the Paris Club of official creditors in April was helping poorer countries, but more measures would be needed to prevent the economic crisis from worsening poverty rates, did he declare.

He did not endorse calls by African countries and others for an extension of debt relief until 2022 and cancellation of some debts, but said more measures would be needed.

“We need to look for ways to further reduce the debt of the poorest countries, and then look at the larger situation facing developing countries,” he said.

He also urged the private sector to increase its participation.

“It doesn’t really make sense that commercial creditors continue to collect, demand and legally enforce payments from (…) the poorest countries that have been hit by both the pandemic and the recessions. deepest economic growth since World War II, “he said. .

Some countries have been reluctant to seek such relief for fear that it could harm their credit rating and access to international capital markets.

Greater transparency about debt levels and creditors could pave the way for increased investments to promote future growth, he said.

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Emerging economies call for more ambitious debt relief programs

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Government ministers from poor and indebted countries will this week appeal to their creditors for a much more ambitious debt relief effort as they grapple with the health and economic consequences of the coronavirus pandemic.

They will advocate for greater support from foreign governments and multilateral lenders as delegates gather for the annual IMF and World Bank meetings.

Financial assistance to cash-strapped governments has so far fallen far short of what is needed – and what advanced economies have been willing to do for themselves – critics say.

As Covid spread across the world this spring, the group of major G20 countries struck a deal allowing 73 of the world’s poorest countries to postpone this year’s official bilateral debt repayments for three years. But the broader options have failed as China and the United States have been reluctant to engage in broader collective action.

So far, 43 countries have requested debt suspensions under the initiative, delaying about $ 5.3 billion in payments this year, less than half of the $ 11.5 billion available, according to the Bank. global.

Critics say the debt service suspension has been hampered by confusion and disagreement over who should participate and on what terms. Private sector creditors, including commercial banks and bondholders, are not involved and have continued to receive repayments. China, which has become an important source of loans to poor countries in recent years, has only partially contributed.

Only three of the 43 countries concerned have asked private creditors for comparable debt relief and no agreement has yet been reached according to the IMF.

The G20 is expected to announce an extension of the moratorium on repayments as early as this week. But finance ministers in countries in need of debt relief told the Financial Times much more needs to be done.

“The ability of Western central banks to react [to the pandemic] to an unimaginable extent and the limits of our response capacity are quite shocking, ”said Ken Ofori-Atta, Minister of Finance of Ghana.

Ghana has criticized Western countries for allegedly overlooking the growing crisis in Africa while finding billions of dollars to boost their own economies.

Adama Coulibaly, Minister of Economy and Finance of Côte d’Ivoire, said: “We hope that the [debt service suspension] will be extended for one year so that the initiative can have a real impact.

But Ukur Yatani, Kenya’s finance minister, told the FT that his country would stay away from the initiative. “Delaying our repayments for three years without giving us a break would place a heavy burden on us. We have heavy repayments at this time, ”he said.

Instead, Yatani said his hopes were based on an IMF program Kenya has started negotiating.

Richard Kozul-Wright, director of development strategies at the United Nations Conference on Trade and Development, said that “anything that provides resources that can be used to fight the pandemic in the most vulnerable countries must be fine. welcomed ”. But, he warned, “overall, given the financial constraints these countries face, [the debt service suspension] just looks like a drop in the ocean ”.

Vera Songwe, head of the United Nations Economic Commission for Africa, is coordinating an appeal from African finance ministers for $ 100 billion a year for the next three years to support the stricken economies on the continent.

This is a fraction of the fiscal and monetary stimulus already provided to the United States and Europe compared to Africa’s combined annual economic output of around $ 2.6 billion, he said. she declared.

Although Ms. Songwe would like the initiative to be expanded to benefit more countries, she said a loan guarantee mechanism to reduce borrowing costs for poor countries – which are already prohibitive for many low-income countries. credit rating – would be more powerful.

The “ideal private sector contribution to this crisis” would be for investors to agree “to make less income so that countries can access the resources they need at a lower cost,” she said.

The question is how to finance such an installation. The IMF could launch more of its so-called Special Drawing Rights (SDRs) – a form of proxy reserve asset – but that possibility has been vetoed by the United States.

Ms. Songwe called on G20 central banks to support the idea.

Ghana supports the idea of ​​using the SDRs to help amortize the finances of emerging economies and has been frustrated by what it sees as US opposition to the proposal.

“Not only should we create new SDRs to help us, but a lot of western countries do not use them, which means they could be transferred to us to prevent our liquidity problems from turning into insolvency problems. “said Mr. Ofori-Atta.

Unless this week’s lobbying generates new momentum, however, finance ministers in many developing economies will have to think about how to cope in the coming months as the costs of Covid rise.

“It is unthinkable that in a global pandemic, the world’s poorest countries will have to choose between paying down debt service and keeping their savings afloat,” said Gayle Smith, president of One Campaign against Poverty.

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The IMF Executive Board approves a disbursement of $ 43.4 million to Djibouti under the rapid credit facility and debt relief under the Containment and Development Trust Fund. disaster relief to cope with the COVID-19 pandemic

IMF Executive Board approves US $ 43.4 million disbursement to Djibouti under the Rapid Credit Facility and Debt Relief under the Containment Trust Fund and disaster relief to cope with the COVID-19 pandemic

May 8, 2020

  • The IMF Executive Board approved a $ 43.4 million loan to Djibouti to support the authorities’ response to the COVID-19 crisis, as well as debt relief under the CCRT, which will generate additional resources of $ 2.3 million over the next five months. , and potentially up to US $ 8.2 million over the next 23 months.
  • IMF support will provide additional resources for essential health and other emergency spending, including social safety nets. It will also help catalyze additional donor support.
  • The authorities are committed to using the additional IMF resources in a transparent manner and to ensuring that spending is well targeted and cost effective.

The Executive Board of the International Monetary Fund (IMF) today approved a rapid credit facility (RCF) disbursement equivalent to SDR 31.8 million (approximately $ 43.4 million, 100% of Djibouti’s quota) to help Djibouti cope with the urgent balance of payments. needs related to the COVID-19 pandemic. It also approved grants under the IMF Containment and Disaster Relief Trust Fund (CCRT) to cover Djibouti’s debt service due to the IMF today as of October 13, 2020, i.e. ‘equivalent of SDR 1.692 million or $ 2.3 million. Additional relief covering the period from October 14, 2020 to April 13, 2022 will be granted subject to the availability of CCRT resources, potentially bringing the total debt service relief to the equivalent of SDR 6.03 million; approximately $ 8.2 million.

The COVID-19 pandemic has significantly weakened Djibouti’s short-term macroeconomic outlook. The country is facing a significant negative external demand shock due to the global recession. Nationally, virus prevention and containment measures further affect demand and supply. Production is expected to contract by 1% in 2020 and the decline in services exports and foreign direct investment has created an urgent need for balance of payments financing in the order of 164 million dollars. The pandemic has also created urgent spending needs, including in the health sector, and is expected to negatively affect government revenues.

Following the discussion by the Board of Directors. Mr. Mitsuhiro Furusawa, Deputy Director General and Acting President, made the following statement:

“The COVID-19 pandemic is having a severe impact on Djibouti, creating an urgent balance of payments and budgetary financing needs. Authorities acted quickly to contain and mitigate the spread and impact of the virus. Their prevention and containment measures and their decisions to increase health and other emergency spending to protect households and businesses affected by the crisis will help limit the economic and social consequences.

“The crisis and the political response will lead to a widening of the budget deficit this year. IMF emergency financing under the Rapid Credit Facility and debt service relief under the Containment and Disaster Relief Trust Fund will provide much-needed liquidity to support the authorities’ response to the crisis. crisis and could catalyze further assistance from the international community, preferably in the form of grants. The authorities are committed to using the additional resources in a transparent manner and to ensuring that spending is well targeted and cost effective.

“Once the crisis subsides, temporary measures should be lifted, with policies refocusing on promoting a strong and inclusive recovery and maintaining medium-term debt sustainability. Addressing and preventing the recurrence of external arrears, speeding up key project operations and reducing public sector borrowing will be essential. Reducing tax expenditures will also be important in creating space for poverty reduction spending. Efforts to strengthen bank balance sheets, improve the business environment, and improve governance and the efficiency of state-owned enterprises will be key to fostering strong and inclusive growth.

More information:

IMF Lending Tracker (request for emergency financing approved by the IMF Executive Board)

IMF Executive Board Calendar

IMF Communications Department


Telephone: +1 202 623-7100E-mail: [email protected]

@ IMFSpeaker

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The Holy See at the UN calls for debt relief for poor countries

Bishop Gabriele Caccia, Permanent Observer of the Holy See to the United Nations, underlines the importance of developing economic and financial policies that truly serve the common good of all.

By the editor of Vatican News

“Every decision and policy on economic or financial matters has an impact on the lives of individuals, families and the well-being of society as a whole.” With this premise, the Holy See encourages debt restructuring, and ultimately debt cancellation of the most vulnerable countries, to cope with the growing economic imbalances and other crises they face as a result of the pandemic. of Covid-19.

The Permanent Observer of the Holy See to the United Nations, Mgr Gabriele Caccia, launched this appeal on Thursday during the 75e Session of the United Nations General Assembly.

He said in a statement that due to the demands placed on the poorest countries by the debt service and the economic impact of the pandemic, many of them are forced to “divert scarce national resources from basic programs. education, health and infrastructure towards debt payment. . “

Archbishop Caccia reminded the UN, specifically addressing the Commission on Macroeconomic Policy, that his work should reflect on “ethical implications for achieving economic prosperity for all in order to enable every person to prosper and countries to live in peace and stability “. As such, decisions and policies on economic or financial matters which have an impact on the lives of individuals, families and the well-being of society as a whole “must be viewed in a much broader perspective than the only immediate financial gain or success ”.

Covid-19 and the economy

Bishop Caccia stressed that financial inclusion and sustainable development have been affected by the Covid-19 health crisis due to its devastating impact on employment, production and international and national trade. No one, he notes – from states to families and individuals – has escaped the economic hardships caused by the pandemic.

However, some felt the impact more than others. Developing countries, he said, are being hit by “a triple economic shock of collapsing export demand, falling commodity prices and unprecedented capital flight”, in addition to managing the pandemic with often inadequate health systems.

Recover together

To face these difficulties, Bishop Caccia proposes to work together to ensure that the economic “recovery packages” and “regeneration packages” serve the common good. In particular, it highlights two areas that require special attention in turnaround efforts.

The first, according to the Archbishop, are micro, small and medium enterprises. He points out that to revive the economy, funding would have to reach a large number of small and medium-sized enterprises that “are the backbone of economies” in developed and developing countries.

The second sector concerns workers in “informal” employment. He explained that we have a “special responsibility” to those people – men and women – who are made redundant in fields like construction, catering, hospitality, domestic services and retail, among others, and in as such, find it difficult to provide for themselves and their families. Many of them, he notes, turn to charities and religious institutions for help. Others, especially migrants and those without proper documentation, cannot apply for benefits.

Debt restructuring / cancellation

Bishop Caccia said that there is ample evidence that developing countries, faced with the obligation to divert scarce resources towards debt repayment, risk undermining “integrated development, weakening health systems and education, as well as reducing the capacity of states to create the conditions for the realization of basic human rights.

The Archbishop therefore urged the international community to address the economic imbalances between nations by restructuring and ultimately debt “in recognition of the severe impacts of medical, social and economic crises” facing the most vulnerable countries due to of the current crisis. pandemic.

He also called on the international community to fight illicit financial flows (IFFs) which, by diverting resources from public spending and reducing the capital available for private investment, “deprive countries of the resources they desperately need to provide. public services, finance poverty reduction programs. and improve infrastructure.

In conclusion, Bishop Caccia encouraged the UN to “find ways to highlight the broader and ethical implications of economic activity in the years to come” and stressed the need to transform the economy for it to be ” truly at the service of the human person “.

Pope Francis

The Pope has repeatedly stressed the need for a new economic model, especially as countries restart after the Covid-19 pandemic. He has often said that “the only way out of the current crisis is together”.

During his Urbi and orbi for Easter, he specifically addressed the topic of debt relief. “In light of the current circumstances,” Pope Francis said, “that international sanctions be relaxed, as they prevent the countries on which they have been imposed from providing adequate support to their citizens, and that all nations be brought into line. position to meet the greatest needs of the moment by reducing, if not canceling, the debt weighing on the balance sheets of the poorest nations. “

In his last encyclical Fratelli tutti, he spoke about debt relief in the context of the fundamental right of peoples to survive and grow. This right, he said, is sometimes “severely restricted by the pressure created by the external debt”. This debt stifles and severely limits development, he continued. “While respecting the principle that any legitimately acquired debt must be repaid, the way in which many poor countries fulfill this obligation must not end up jeopardizing their very existence and their growth.”

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Somalia Debt Relief, Government Efforts to Combat COVID-19, and Further Boko Haram Attacks

Debt relief in Somalia and other African countries

On Wednesday, the World Bank and the International Monetary Fund (IMF) jointly announced that Somalia is now eligible for debt relief as part of the Heavily Indebted Poor Countries (HIPC) initiative. The success of the HIPC program reduce Somalia’s external debt from the current $ 5.2 billion to $ 557 million in about three years. Somalia will also be eligible to receive new international financing for the first time in 30 years, including access to IMF emergency aid grants to respond to the coronavirus pandemic. Thursday the European Union announced $ 47 million grant to help Somalia clear its debt arrears. A number of Somalia’s bilateral creditors will also meet on March 31 to discuss debt relief, Somali Finance Minister Abdirahman Duale Beileh hoping 75 to 80% debt relief and a multi-year repayment program. Find out more about debt relief and economic adjustments in conflict-affected states, see the October 2019 event where the Brookings Africa Growth Initiative hosted Minister Beileh to discuss his country’s efforts for debt relief.

In related news, the IMF and World Bank jointly called on bilateral creditors to suspend debt payments of 76 poorest countries in the world to enable them to channel additional resources to fight the coronavirus pandemic. At the same time, Ethiopian Prime Minister Abiy Ahmed, in coordination with other African leaders, called on the G-20 to provide $ 150 billion for the continent’s response to the coronavirus. Abiy’s proposal calls for additional funding for African health systems, partial debt relief and support for struggling businesses, among others.

African governments respond to the spread of COVID-19

Like the rest of the world, Africa continues to face the devastating effects of the spread of COVID-19. According to the World Health Organization (WHO), at the time of this writing, the disease is confirmed in 39 countries in the WHO Africa region with over 2,500 cases.

In response, governments have adopted a wide variety of strategies to contain the disease and mitigate its impact on their economies. South Africa, where the the highest number of cases have been confirmed (over 1,100 to date), implemented a 21 days of national confinement from midnight on March 26. In particular, the WHO has adopted a WhatsApp platform by the South African nonprofit to provide free automated responses with symptom information, travel tips and number updates to its users. The platform had already in use by the country’s health department.

Sunday March 22, Maurice forbids all entry—Including that of foreigners and Mauritian nationals and citizens — in the country for 14 days. That same day, Tunisia announced a 14-day lockdown period, with the exception of persons carrying out certain essential activities. The next day, Uganda has banned all inbound flights. Later in the week it prohibits all public transport. Monday also, Ethiopia closes land borders. Nigeria banned all interstate travel.

From Friday March 27, Kenya implemented a curfew between 7 p.m. and 5 a.m. Senegal, Ivory Coast and Sudan announced similar curfews. Also in Kenya, President Uhuru Kenyatta and Vice President William Ruto announced a 80 percent voluntary pay cut. Kenyatta’s ministers also take cuts between 20 and 30 percent; Kenya’s parliament will also take 30 percent over the next three months. The The Kenyan government has also offered tax relief for the general population: 100% for those earning less than $ 240 per month, and an income tax cut of 5% for everyone else. Interestingly, an aversion to fish imports from China caused the The booming Kenyan fishing sub-sector.

In the positive news, Senegal announced that researchers at its Institut Pasteur have started validation trials on a $ 1, home COVID-19 diagnostic test which can produce results in as little as 10 minutes. In Cameroon, one of the rebel groups, the Southern Cameroons Defense Forces (Socadef), has temporarily called for a ceasefire in its efforts to break away from largely French-speaking Cameroon and create an English-speaking state, although others groups continue to fight.

On Thursday, the African Development Bank also sold $ 3 billion in three years “Fighting COVID-19 Social Obligations”. In the meantime, the African Import-Export Bank announced the creation of a $ 3 billion credit facility to help African countries fight the effects of the pandemic.

You can find more Brookings comments on the COVID-19 pandemic here.

Nigeria and Chad affected by terrorist attacks by Boko Haram

Two attacks from jihadist groups Boko Haram and the Islamic State in the province of West Africa (ISWAP) – a Boko Haram splinter group – killed more than 140 soldiers this week in Chad and Nigeria. In Chad, 92 soldiers were killed by Boko Haram on Sunday March 22 in the Boma peninsula near Lake Chad. The attack was the Boko Haram’s deadliest attack on the Chadian military forces. In Nigeria, 50 soldiers were killed by ISWAP in an ambush in eastern Borno state on March 23. The attack occurred after an attempted offensive against ISWAP by the Nigerian military which started this weekend.

Boko Haram was active in northeast Nigeria since 2009, and over the past decade, with ISWAP, has also spread to neighboring Cameroon, Chad and Niger. According to the United Nations, approximately 36,000 people were killed and nearly 2 million displaced in northeastern Nigeria since the start of the Boko Haram insurgency. Despite regional efforts to defeat jihadist groups, the attacks have multiplied in recent months.

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VA Debt Management Center to resume sending notification letters in January 2021

The VA Debt Management Center (DMC) is sending a letter to veterans with benefit debts this month, advising them that due process notification letters will resume after January 1, 2021.

The November letter reads as follows:

Dear veteran / beneficiary,

We hope this letter finds you well. You are receiving this letter because you may have unpaid VA benefit debts, and we want you to be aware of the actions VA will take after January 1, 2021 and your options.

To alleviate financial hardship during the pandemic, the VA Debt Management Center (DMC) has suspended issuance of debt notification letters and suspended collection actions on debts established after April 3, 2020 until January 1, 2021. DMC has also offered suspensions or extended repayment plans for the debts. established before April 3, 2020.


If your debt was established after April 3, 2020, DMC will issue your debt notification letter (s) from January 2021. If you have a debt established before April 3, When collections have been suspended due to the COVID-19 pandemic, your suspension will end on January 1, 2021 and the DMC will resume withholding from your VA benefits to pay the debt upon your benefit payment on February 1, 2021. If you do not receive VA benefits, your payment will be due to DMC by February 1, 2021.


If you anticipate payment difficulties, you don’t have to wait until after January 1, 2021 to seek help. Please see the information found on our website:; or contact the DMC for assistance with or call us at 1-800-827-0648.

We can work with you to determine your debt relief options, which may include:

  • Establish a repayment plan.
  • Request a waiver.
  • Debt challenge.
  • Submit an offer in compromise.
  • Request a temporary suspension of tests.


  • For any questions about your VA benefit debt, including information on how to enter into voluntary repayment agreements or request a waiver, dispute, or offer in compromise, submit your request online at or call 1-800-827-0648 6:30 a.m. to 6 p.m. CT Monday through Friday.
  • If you have a question about your VA benefits or the status of a claim, please call:
    • Educational Benefits – VA Education Contact Center at 1-888-442-4551.
    • Other VA Benefits – VA Regional Office at 1-800-827-1000.
  • For any questions about your VA health care debt, call the Health Resource Center at 1-866-400-1238.
  • If your debt has been submitted to the US Treasury Department, the debt will remain under their jurisdiction. The treasury can be reached at the following address:
    • Cross Service Program at 1-888-826-3127.
    • Treasury Compensation Program at 1-800-304-3107.

We are here to support you during this COVID-19 pandemic. Please follow national and local guidelines to stay healthy and safe.

The VA Debt Management Center (DMC) provides veterans and recipients with compassionate advice on their VA benefit debts. DMC manages the debt collection process and provides assistance with debt resolution options, such as payment plans and waivers.

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SL-PAK will work on Debt Relief, Connectivity: Khan

  • PAK PM Says Developed Countries Must Support Poor In Poor Countries
  • Khan supports stronger business relationship, note via PAK, SL can achieve connectivity with Central Asia
  • SL-PAK signs five memoranda of understanding, cooperation in multiple areas, including tourism
  • Invite MR to visit PAK

Prime Ministers Mahinda Rajapaksa and Imran Khan at the signing of the MoU at Temple Trees yesterday – Photo by Ruwan Walpola

Sri Lanka (SL) and Pakistan (PAK) have agreed to work jointly on negotiating debt relief, PAK Prime Minister Imran Khan said yesterday, calling on international organizations to help poor countries to meet the economic challenges made worse by the pandemic.

Khan, who arrived in SL last afternoon for a two-day visit, was greeted by his SL counterpart Mahinda Rajapaksa. The two prime ministers held bilateral talks at Temple Trees and issued a joint statement to the media after their meeting. Khan also invited Rajapaksa to visit PAK.

“We discussed how developed countries can help the developing world. The developed world must not be an island, it must realize that this is a problem that has affected everyone, but in particular, it has affected poor countries more and the poor in poor countries much more. So we discussed how we can work together so that poor countries get debt relief, ”Khan told reporters.

He pointed out that although PAK offered the largest stimulus package in its history of $ 8 billion, it was tiny compared to the US plan of almost $ 3 trillion.

“So that’s the gap. The coronavirus has exposed this huge disparity in the world and that’s why I think global organizations like the UN should step in and deal with countries that have been really beaten because of COVID-19. ”

Pointing out that SL and PAK were part of the Belt and Road Initiative (BRI), Khan encouraged stronger trade between the two countries, as this would give SL connectivity to Central Asia through the China-Pakistan Economic Corridor (CPEC ).

“This visit aims to strengthen our bilateral relations; it is to strengthen our commercial ties. Pakistan is part of the BRI of China and that means connectivity so I have asked my delegation here to find ways to improve trade and connectivity, and through CPEC, connectivity to Asia. Central for Sri Lanka. Our trade ties also mean that our countries will come closer. “

SL and PAK also signed five memoranda of understanding yesterday. The memoranda of understanding were aimed at improving bilateral economic and social cooperation.

“Mr. Prime Minister, you are no stranger to the people of Sri Lanka. There are millions in this country who have admired you, your leadership on the cricket pitch as captain of the Pakistan national team. Your country continues to be a valuable bilateral partner and Sri Lanka regards Pakistan as a close and genuine friend. Our people hold Pakistan in the highest regard. Pakistan is a country that has supported Sri Lanka in times of great need, ”Rajapaksa said during the joint statement.

“During our bilateral discussions, Prime Minister Khan and I agreed to work closely together to strengthen our bilateral cooperation in the economic sector and several other areas, including trade, investment, science and technology , defense and education.

“We also agreed to seek opportunities under the Sri Lanka-Pakistan Free Trade Agreement (FTA). Our talks also covered important regional and international issues as well as the impact of the COVID-19 pandemic. We also agreed to continue our engagement in the tourism and aviation sectors. Sri Lanka is grateful to Pakistan for opening travel lanes to visit ancient Buddhist heritage sites in Pakistan, ”he added.

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China helps Africa pay off debt amid Covid-19 pandemic

Through Jonisayi Maromo October 15, 2020

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Pretoria – The People’s Republic of China has put in place a series of interventions to amortize African countries struggling to honor their debts with Chinese institutions in an attempt to ease the pressure on repayments, the Chinese ambassador said in South Africa, Chen Xiaodong.

“China attaches great importance to Africa’s debt sustainability and the economic and social profitability of projects. By putting ourselves in Africa’s shoes, we have worked to help Africa prevent debt risks and ease the pressure on repayments, ”Chen said.

He was speaking at a dialogue webinar hosted by the South African Institute of International Affairs and the China-Africa Joint Research and Exchange Program.

“China is committed to ensuring effective and high-quality development in Africa in a way that respects the will of the African people and meets their real needs. Covid-19 is exerting increased economic pressure on African countries. “

China is taking the situation “seriously and has made active efforts” to meet Africa’s needs.

“Based on the implementation of the G20 Debt Service Suspension Initiative and within the framework of the China-Africa Cooperation Forum, China declared to cancel the debt of the African countries concerned in the form of interest-free government loans that are due. by the end of 2020, ”Chen said.

“China also calls on multilateral financial institutions and private creditors to increase their support for African countries severely affected by the pandemic, including debt restructuring and a further extension of the debt relief period. “

He said the Export and Import Bank of China, as the official bilateral creditor, has so far signed debt suspension agreements with 11 African countries.

The South African Institute of International Affairs and the China-Africa Joint Research and Exchange Program, an initiative of the Forum on China-Africa Cooperation, are jointly organizing a series of dialogues on promoting Africa-China cooperation.

On Tuesday, Chen said the China-Africa friendship and cooperation emerged stronger from the challenges and difficulties.

“However, some forces with ulterior motives have continued to fabricate the so-called ‘debt trap fallacy’, ‘strategic asset plunder fallacy’ and ‘neocolonial fallacy’ to exert pressure on African countries. and prevent their cooperation with China in 5G and other areas, ”Chen said.

“They are trying to drive a wedge between China and Africa and force Africa to take sides. All of their actions are attributed to the Cold War mentality and the zero-sum gaming mentality. “

He pointed out that China has remained Africa’s largest trading partner for 11 consecutive years. He said bilateral trade between China and Africa reached $ 208.7 billion (Rand 3.4 trillion) last year, 20 times more than in 2000.

African News Agency (ANA)

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China’s debt trap speech shows Africa’s weak economic position – Quartz Africa

Along the shores of the Indian Ocean, the Kenyan port of Mombasa is one of the largest and busiest ports in East Africa.

Nearly 1,800 ships moored at the port in 2017 alone, with cargoes worth more than 30 million tonnes handled, much of which was destined for neighboring or landlocked countries, notably Uganda, Rwanda, Burundi and DR Congo . Since its opening in the mid-1890s, the seaport has grown into a booming regional hub and a key cog in Kenya’s growing infrastructure development.

In December, reports surfaced the prized port was used as collateral for the $ 3.2 billion loan that was used to build the 470 kilometer (292 mile) railway line between the seaside town and the capital Nairobi. In a leak report Linked to the Auditor General’s office, Kenya would risk losing its port in the event of default, with Exim Bank of China taking over the port authority’s “escrow account” to recover revenue. Other reports have even noted it goes beyond a single asset it was put as collateral and that possession of “any state” was on the table in the event of non-payment.

The revelations sparked immediate fury and denials triggered Chinese and Kenyan officials. China is currently Kenya largest bilateral creditor, and many have raised questions about the growing risks the East African nation faces as it borrows more money to finance large infrastructure projects.

The outcry also highlighted the issue of “debt trap diplomacy”: a term that has gained popularity in the lexicon of global geopolitics as China exerted its influence around the world. The specter of Beijing extracting economic or political concessions from a country unable to pay its debts was first highlighted in December 2017, when Sri Lanka gave 70% capital and a 99-year lease for its strategic port of Hambantota.

Since then, nations from Djibouti and the Maldives to Laos and Pakistan have been identified as facing risk of over-indebtedness, especially in the face of the multi-billion dollar Belt and Road initiative. Last year, Beijing was also accused of take control Zambia’s national electricity supplier and the reconstruction of the port of Mogadishu in exchange for “exclusive” fishing rights along the Somali coast – allegations that have proven to be inaccurate and that the authorities have refuted.

REUTERS / Joseph Okanga

Mooring at the port of Mombasa.

Western leaders, building on these examples and wary of China’s growing financial and economic power, have warned African states against the exit these loans. Observers also pointed out that Beijing is offering financing with less conditions and Do not be part of of the global multilateral framework for public creditors known as the Paris Club. This raised questions about transparency, sustainability and commercial viability loans financed by the Chinese state, which multiplied by ten over the past five years in Africa.

In the absence of officially published contracts and “predictable written rules” on how Beijing reacts to a default, “people are free to speculate,” said W. Gyude Moore, visiting researcher at the Center for Global Development. Between 2000 and early 2019, there was 85 instances when China canceled or restructured its debt globally, including more recently in Cameroon.

Sri Lanka’s port remains the only place in the world where Beijing has taken control of a state asset, observers noting officials have understood the damage “debt portfolio diplomacy” could cause to the government. China. Yet Beijing’s debt relief or repayment actions, Moore notes, remain “hit and miss. It’s unpredictable. There is nothing written. It’s confusing.”

Growing sinophobia

Chinese loans are not currently a major contributor to the debt burden in Africa; much of it is still due to traditional lenders like the World Bank. Yet Kenyan economist Anzetse Were says the debt trap narrative and anti-Chinese sentiment have intensified because African countries like Kenya have a fundamental problem with budget transparency and because the continent’s past relationship with outside forces, both before and after independence, were one of the “defined by exploitation”.

The general public, she said, remains in the dark about the deals with China. “We don’t know how much we owe; we don’t know the terms.

Yet that should not detract from the efforts of African leaders to burden their nations with unnecessary debt, says Lina Benabdallah, assistant professor of policy at Wake Forest University in North Carolina. “The problem isn’t borrowing money; the problem is managing it and making informed decisions about how to pay it back.

The opacity surrounding the Chinese agreements in Africa – elsewhere those signed with the United States and Europe– also highlights, according to Were, the weakness of Africa’s economic diplomacy and its inability to create institutional frameworks responding to the interests of taxpayers. This is especially crucial in a multipolar world where the scope of interest and engagement in Africa extends beyond China, the EU and the US to include Brazil, Turkey, India, Japan and Gulf states.

And without the ability to negotiate effectively, Were argues that “their agendas will guide our response rather than our agenda meeting them with their best interests and seeing how we can both benefit.”

This is especially true for small countries with weak governments like Somalia, which faces not only technical and resource constraints, but also mechanisms to “ensure compliance, financial probity and oversight,” says Rashid. Abdi, director of the Horn of Africa project at the International Crisis Group.

REUTERS / Thomas Mukoya

New railway line.

Negociation power

Because there is no frame of reference for the Chinese agreements, Moore, who was previously Liberia’s public works minister, says African governments can improve their negotiating capacity by relying on litigation services global. These include the African Legal Support Facility hosted by the African Development Bank or pro bono entities such as the International Senior Lawyer Program. The mobilization of these resources, he adds, could improve the quality of project selection and the process of their implementation.

It will be crucial to become effective in these negotiations as China faces an economic slowdown, growing debt and internal criticism of why it has been. spend taxpayer money abroad, not to mention the external reproach that its presence in Africa akin to neo-colonialism. The state-funded insurance company Sinosure, for example, recently said he lost up to $ 1 billion on the Addis-Djibouti railway.

Moore says this means that the “validity and legitimacy” of Chinese loans will continue to be questioned if they are made in secret, especially if a nation commits to an obligation for two to three decades.

“China doesn’t have to adhere to Paris Club rules,” says Moore. “China can write its own rules and publish them. “

In the meantime, Were says African citizens must advocate for and build technocratic governments that are democratically responsive. This is “probably the biggest challenge for our generation”.

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Pakistani Prime Minister Imran Khan urges Western governments to forgo debt repayment

Pakistani Prime Minister Imran Khan warns MORE people in developing countries will starve under coronavirus containment than will be killed by disease as he urges Western governments to forgo debt repayment

  • Pakistan has recorded 5,183 infections, with 88 deaths, so far in the pandemic
  • Its already struggling economy has been hit hard by nationwide lockdowns
  • They crippled economic activity and caused a lot of unemployment
  • Prime Minister Imran Khan said he fears people in the developing world will starve
  • He said he called on world leaders and the UN to announce a debt relief initiative
  • Learn more about how to help those affected by COVID

Pakistan has appealed to international stakeholders for urgent debt relief for developing countries so that they can deal more effectively with the economic fallout from the coronavirus pandemic, the government said on Sunday.

The country has recorded 5,183 infections, with 88 deaths, and its already struggling economy has been hit hard by preventive lockdowns nationwide.

They crippled economic activity and caused widespread unemployment.

Prime Minister Imran Khan, in a video message released by the Foreign Ministry, said he feared people in the developing world were dying because of the lockdowns.

The country has recorded 5,183 infections, with 88 deaths, and its already struggling economy has been hit hard by preventive lockdowns nationwide. Pictured: Women practice social distancing while waiting to get money in Lahore

The closures crippled economic activity and caused widespread unemployment.  Pictured: Christians hold candles as they pray at an Easter service in Islamabad

The closures crippled economic activity and caused widespread unemployment. Pictured: Christians hold candles as they pray at an Easter service in Islamabad

Khan said: “Pakistan with a population of 220 million, so far the best stimulus package we can afford is $ 8 billion.”

He added that heavily indebted countries lack fiscal space to spend on health and social support.

Pakistan, which has more than $ 100 billion in debt to foreign lenders and spends most of its budget on debt servicing, last week launched a $ 900 million cash disbursement program to 12 million poor families jobless due to blockages.

Khan added that heavily indebted countries lack fiscal space to spend on health and social support.  Pictured: Christians over Easter weekend in Islamabad

Khan added that heavily indebted countries lack fiscal space to spend on health and social support. Pictured: Christians over Easter weekend in Islamabad

Pakistan last week launched a $ 900 million cash disbursement program for 12 million poor families jobless due to lockdowns.  Pictured: Christians in Islamabad

Pakistan last week launched a $ 900 million cash disbursement program for 12 million poor families jobless due to lockdowns. Pictured: Christians in Islamabad

Khan said he called on world leaders, heads of financial institutions and the United Nations secretary-general to announce a debt relief initiative for developing countries.

Pakistan will receive $ 1.4 billion from the International Monetary Fund (IMF) as part of the organization’s rapid finance instrument to help fund the country’s response to the virus.

It is also currently in the first year of a three-year, $ 6 billion IMF program to help its struggling economy.

Khan said he called on world leaders, heads of financial institutions and the United Nations secretary-general to announce a debt relief initiative for developing countries.  Pictured: Christians in the capital Islamabad

Khan said he called on world leaders, heads of financial institutions and the United Nations secretary-general to announce a debt relief initiative for developing countries. Pictured: Christians in the capital Islamabad

Pakistan will receive $ 1.4 billion from the IMF as part of its rapid financing instrument to help finance the country's response to the virus.  Pictured: Police stand guard in Karachi's Gulistan-e-Johar neighborhood after it was closed due to multiple coronavirus cases

Pakistan will receive $ 1.4 billion from the IMF as part of its rapid financing instrument to help finance the country’s response to the virus. Pictured: Police stand guard in Karachi’s Gulistan-e-Johar neighborhood after it was closed due to multiple coronavirus cases

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Student debt, political depression and eco-anxiety: in the spirit of the millennium

“When I graduated, I owed US $ 48,000 in student debt. I paid almost US $ 6,000. Today I owe US ​​$ 49,000, ”said a 2016 graduate of Columbia College in South Carolina. International study.

As the 2020 US presidential race intensifies, the lofty promises of politicians from global student debt relief has invaded social media and raised hope in millions of graduates.

For this borrower, whose total student loan debt is approaching US $ 50,000, I can only wish some kind of debt relief beyond my income-based repayment plan.

But I don’t hold my breath.

At US $ 1.5 trillion, the student debt crisis has broken records this year. In the United States, student loan debt is second only to mortgage debt at US $ 8.8 trillion. Compare these two deficits in total US national debt of $ 22 trillion.

The fact that the amount spent over tax cuts for ultra-rich Republicans would cover the nation’s entire student loan debt only exacerbates the problem.

Houston, I think it’s safe to say we have a problem. A parcel of problems, in fact.

Debt forgiveness vs education reform

As financial writer Robert Farrington points out in a recent Forbes article, General Student Loan Cancellation Plans address the symptoms, rather than the cause, of student debt:

“When the average cost of one year for a four-year public school is $ 10,230 according to College Board, and those costs climb to $ 21,270 per year when you add room and board, it’s mind-boggling to see how a “solution” exists that in no way tries to control costs.

Farrington’s observation is just about the money. Student loan cancellation legislation without a contingency plan to control tuition fees isn’t just a bad idea – it’s an outright insult to past, present and future graduates and students.

At least UK universities are capped on the tuition fees they can charge. Meanwhile, the average American college student spends almost US $ 100,000 on their degree, and schools can increase tuition fees when and how they see fit.

Out with the old, with the new

“Millennials Deserve a Baby Boomer Break,” reads the headline of a recent Vox article on Bernie Sanders’ student loan forgiveness proposal.

I generally avoid discussing politics publicly – in large part because of political depression in addition to your chronic garden-variety depression – but I admit I smelled Bern during the last presidential race.

This flame has since been extinguished.

Although I admire Sanders’ impressive track record as an activist and agree with most of his ideas, including parts of his student loan cancellation proposal. We to do need a break from the baby boomers – this includes candidates like Biden, Sanders and Warren.

Sanders and Warren, at least on the surface, sympathize with the working class and fight for the working class, but let’s be real; if either of them becomes president, their proposals are unlikely to pass a perpetually divided Congress, no matter how much I and other working class people might want (and need).

Despite this, literally anything is better than the alternative: four more years of an incredibly corrupt xenophobic administration led by a hypocritical, racist and homophobic con artist. Frankly, there aren’t enough strong words in English to sum up my contempt for a government that is literally running concentration camps in 2019.

U.S. Senator and Democratic presidential candidate Bernie Sanders speaks during a campaign rally at the Family Arena in Saint Charles, Missouri. Source: Shutterstock


While I will do my civic duty and vote for any candidate who opposes Trump, I can’t help but fear a repeat of the last election. What if the primary was rigged again? What if the elections were rigged again? And if we don’t get the candidate we voted for – again?

Add a pinch of eco-anxiety …

Even writing this article fills me with despair and despair. “What’s the point? The coming climate catastrophe will cancel these problems out anyway.”

Every time I go to the supermarket, I almost feel suffocated by the amount of unnecessary single-use plastic packaging. I made small changes to reduce my carbon footprint: I switched to shampoo and conditioner bars, I started buying second-hand products when possible. I also made some big changes: I refrained from driving and chose not to have children.

I recognize my own role, albeit an incredibly small one, in the fight against climate change. Meanwhile, Trump is publicly denying climate change and filing land development permits citing the threat of climate change to his properties in private.

Other politicians are proposing water waste charges and carbon taxes, so that the responsibility and guilt spills over to us, the consumers. Conversely, most manufacturers are free to produce unlimited quantities of plastic packaging. Cruise ships dump tons of garbage directly into the ocean.

Even my home state of South Carolina Recently voted to spend $ 2.7 million to sink a military submarine that has been idle in Charleston Harbor for 40 years. That’s almost $ 3 million to pollute an already dying ocean.

It’s enough to drive anyone crazy.

Democrats and Israeli environmental activists demonstrate against Donald Trump outside the United States Embassy in Tel Aviv. Source: Shutterstock

What time to live

To cope, I try to remind myself that “panic is a form of pride. It comes from the smug feeling of knowing exactly where the world is headed: down, ”to quote one of my favorite authors, Dr Yuval Harari.

Climate change aside, in an economic and political climate characterized by stagnant wages, inflated living costs and daring corruption, it’s hard to stay optimistic.

Parents, grandparents, aunts, uncles: think twice before criticizing millennials for being lazy or self-centered. Our generation is blamed for all kinds of problems we didn’t create, and we’re tasked with saving a world we didn’t destroy.

The bottom line is that the whole human race must come together, and quickly, to resolve all the bureaucratic damage we have caused and the myriads of natural disasters we have caused.

But I don’t hold my breath.

Liked it? Then you will love …

How can schools ensure that students are prepared for climate change

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Why poor countries reject debt relief

Not all low-income countries are impressed by the G20 pandemic debt initiative. Many believe they can do better by fundraising in the markets.

Amid fears that the pandemic could wreak havoc in poorer countries, the G20 in April launched its Debt Service Suspension Initiative (DSSI) offering a temporary suspension of official government-to-government debt repayments to 73 low-income countries. The initiative was then extended for six months in October, ensuring that it will continue until the end of June 2021.

But so far, around 40% of eligible countries have not applied for DSSI, raising questions about the effectiveness of these programs and whether the downside of reputation for participating outweighs on the limited gains that result from simply deferring payments rather than completely forgetting the debt. .

With interest rates at record highs, now is the time for African and other emerging countries to borrow and invest more than less

For sovereigns who borrow commercially, the demand for DSSI comes with fear of losing market access. Banks and the private sector have so far resisted membership requests, and even if they did, deferral of payments would likely constitute a technical default with all the stigma that this entails for borrowers.

Aid charities have been vocal in their calls for more debt relief at all levels, but in the investment community some argue the opposite argument that with interest rates at rock bottom lines. highs, now is the time for African countries and other emerging countries to borrow and invest. more rather than less.

Emerging markets specialist Renaissance Capital said in a recent report that due to falling bond yields, emerging markets could add 60% of GDP to existing debt without increasing service costs if interest rates fall. 150 basis points only.

While accepting that currency risk is an issue if borrowing is in foreign currencies, the Renaissance Capital report argued, “We believe that an exciting opportunity (and of course, a risk) arises. Governments in FM [frontier markets] could be able to borrow at 4-6% in the 2020s, which (essentially) if well invested, could stimulate real growth by providing critical infrastructure to enable industrialization. “

Of course, the end result crucially depends on this last point – how much money will be invested. But it’s worth noting that in the IMF’s 2020 growth forecast, among the small group of countries (around 25) that will experience positive growth, many of the same names are on the DSSI list. This does not mean that they are not poor, but it does mean that they have upside potential which can be best achieved by promoting capital inflows rather than suspending debt repayments.

Brian Caplen is the editor of The Banker. Follow him on twitter @BrianCaplen

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G20 Extends Debt Relief Plan As Warnings Are Not Enough

The richest countries in the world have agreed to renew a debt relief initiative for the poorest until at least the first half of 2021, short of a World Bank call for a full year extension then that the coronavirus pandemic is worsening poverty.

The G20, in a statement released by Saudi Arabia, which holds the bloc’s presidency, said it could order another six-month extension next year. The statement said G20 members were disappointed at the lack of progress in extending the debt relief plan to involve private creditors.

In an online press conference, World Bank President David Malpass called for more measures for meaningful debt reduction. “There is an urgent need to make rapid progress on a framework as the risk of disorderly defaults increases,” he said.

The consequences for some countries are disastrous. African countries face a $ 345 billion funding gap through 2023, the IMF said last week, with some forced to choose between servicing debt or spending on health and social programs.

Private credit

The group of industrialized economies unveiled the Debt Service Suspension Initiative in April to provide billions of dollars in relief to 73 eligible countries. So far, more than 40 people have requested the aid, which was to last until the end of December, most of them in sub-Saharan Africa. The World Bank estimates that countries could save US $ 12 billion owed to government creditors this year.

Eligible countries can also ask private creditors to freeze repayments, but only a few have done so – a major failure according to advocacy groups. This point was also addressed by the Managing Director of the International Monetary Fund, Kristalina Georgieva, on Wednesday.

The private sector has “unfortunately” shied away from debt relief, she told a virtual press conference. Meanwhile, “countries themselves have been reluctant to ask the private sector for fear it might erode their future market access, access which they have obtained the hard way in previous years,” she said.

Role of China

Malpass had called on the G20 to extend debt relief until the end of next year, and said hedge funds and China should participate more. China owes nearly 60% of the bilateral debt that the world’s poorest countries are expected to repay this year.

He won the backing of German Finance Minister Olaf Scholz, who on Wednesday called for an agreement that included “many other countries not currently participating in the debt suspension.” China must be “part of the solution,” he said.

Advocacy groups like the European Network on Debt and Development say government support alone is insufficient. In a recent report, he likened the initiative to “emptying the Titanic with a bucket” and argued that it was only pushing the risks of a debt crisis “further down the road”.

Technology Tax

Lack of participation from private and multilateral lenders limited the impact of the program, the network said, noting that only 24% of debt payments owed by recipient countries between May and December 2020 were likely to be suspended.

Extending it to the first half of 2021 would cover 44% of debt payments by countries that have applied to participate, according to the report.

The G20 was also due to discuss digital taxation, but said the pandemic had affected work to that end. Disagreements between the European Union and President Donald Trump’s administration have also hampered years-long discussions over new rules. The Organization for Economic Co-operation and Development now aims to conclude the process by mid-2021, increasing the risk of a transatlantic trade dispute and a proliferation of contentious domestic levies on global tech giants.

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Joint Statement by the World Bank Group and the IMF Call to Action on IDA Country Debt

Joint Statement by the World Bank Group and the IMF Call to Action on IDA Country Debt

March 25, 2020

Washington DC The World Bank Group and the International Monetary Fund issued the following joint statement to the G20 on debt relief for the poorest countries:

The coronavirus epidemic is likely to have serious economic and social consequences for

IDA Country
, which is home to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty.

With immediate effect and in accordance with the national laws of creditor countries, the World Bank Group and the International Monetary Fund call on all official bilateral creditors to suspend debt payments from IDA countries that request forbearance. This will help meet the immediate liquidity needs of IDA countries to meet the challenges posed by the coronavirus epidemic and will allow time for an assessment of the impact of the crisis and the financing needs for each country.

We call on G20 leaders to task the WBG and IMF with carrying out these assessments, including identifying countries with unsustainable debt, and preparing a proposal for comprehensive action by official bilateral creditors to meet the needs of financing and debt relief for IDA countries. We will seek the approval of the proposal at the development committee during the spring meetings (April 16 and 17).

The World Bank Group and the IMF believe it is imperative at this time to provide a sense of global relief to developing countries as well as a strong signal to financial markets. The international community would welcome the G20’s support for this call to action.

IMF Communications Department


Telephone: +1 202 623-7100E-mail: [email protected]

@ IMFSpeaker

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Global creditors agree to debt relief for poor countries affected by pandemic

Frenchman Bruno Le Maire.

Eric Peirmont | AFP | Getty Images

Major international creditors will relieve the world’s poorest countries from paying off their debt this year to help them cope with the coronavirus pandemic that triggered the world’s most brutal downturn since the 1930s, announced Tuesday France.

Finance officials from the United States, China and other major Group of 20 economies are expected to finalize the deal when they meet online on Wednesday, French Finance Minister Bruno Le Maire told reporters.

He said some 76 countries, including 40 in sub-Saharan Africa, would be eligible for debt payments worth a combined $ 20 billion suspended by public and private creditors, with the remaining $ 12 billion in payments owed to institutions. multilateral agreements still to be settled.

“We have obtained a moratorium on the debt at the level of bilateral creditors and private creditors for a total of 20 billion dollars,” Le Maire told reporters. He spoke just before the finance ministers and central bank governors of the Group of Seven (G-7) met by videoconference on Tuesday and gave their support for the temporary debt relief of the world’s largest countries. poor, provided it is supported by the G-20 and the Parisian Club.

In a joint statement, they said they were ready to grant “a time-limited suspension of debt service payments due on official bilateral claims for all countries eligible for concessional financing from the World Bank”. they were joined by China and other countries in the Top 20 Group. savings, and as agreed with the Paris Club Creditors Group.

Sources familiar with the process had told Reuters this week that they expected the G-20 to approve a suspension of debt payments at least until the end of the year, despite some resistance from the China, which has overtaken the World Bank as the main lender to development countries, especially in Africa.

IMF chief economist Gita Gopinath told Reuters that the deal offered “extremely welcome” relief to the poorest countries, freeing up resources that could be used to improve health systems at a time when the world’s poorest countries. resources are strained by falling commodity prices and massive capital outflows.

World Bank President David Malpass in a tweet thanked US Treasury Secretary Steven Mnuchin for hosting the G-7 meeting and supporting his joint call with International Monetary Fund Managing Director Kristalina Georgieva for the status temporary quo of debt.

The World Bank and the IMF have started providing emergency aid to countries struggling to suppress the coronavirus and mitigate its economic impact. They first launched their call for debt relief on March 25, but it was not officially endorsed by the G-20 countries.

The IMF, in its World Economic Outlook 2020, said the pandemic will cause the global economy to contract 3.0%, but warned the impact could be much worse.

Gopinath said the pandemic could be much more severe in developing economies that had yet to see the types of lockdowns already implemented in China, the United States and Europe, adding a “serious downside risk To IMF forecasts.

The forecast provided a grim backdrop for the spring meetings of the IMF and World Bank, which normally draw 10,000 people to Washington but are being held by video conference this week due to the pandemic.

Debt cancellation

In their statement, G-7 officials also called for more contributions to the IMF’s Containment and Disaster Relief Trust (CCRT) and its Poverty Reduction and Growth Trust Fund, that support the poorest countries. They said the debt relief effort should include private creditors on a voluntary basis, as well as efforts to improve debt transparency.

Western countries have for years demanded more transparency on Chinese government, bank and corporate loans, but Beijing has been reluctant to open its books.

A French finance ministry official said private creditors have voluntarily agreed to roll over or refinance $ 8 billion in the debt of the poorest countries, in addition to the $ 12 billion in debt repayment to suspend by countries.

An additional $ 12 billion is owed to multilateral lenders, primarily the World Bank, Le Maire said, urging these lenders to join the debt relief initiative. The IMF on Monday announced $ 215 million in initial debt relief grants to 25 countries from the CCRT. The trust has around $ 500 million, but the IMF wants to increase it to $ 1.4 billion.

Nonprofit groups, Pope Francis and others are increasingly calling for action on the temporary suspension of debt payments by canceling the debts of the poorest countries.

The AFL-CIO trade union federation and nearly 80 other faith groups on Tuesday urged the US government, the IMF and G-20 countries to cancel debt payments from developing countries and mobilize additional resources to support all countries affected by the rapidly spreading pandemic.

French President Emmanuel Macron said in a televised address on Monday that African countries should be helped by “massively canceling their debt”.

He gave no details, but Le Maire said outright debt cancellation should take place on a case-by-case basis and in coordination with multilateral lenders at the end of the year, depending on the situation. economic development of countries as well as the evolution of raw materials. markets and capital flows.

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Borrowing costs after debt relief

The Covid-19 pandemic is straining the public finances of many developing countries (Djankov and Panizza 2020). In response, a series of proposals and calls to action have been launched by experts and policy makers (Bolton et al. 2020a, 2020b, Bulow et al. 2020; Horn et al. 2020; Landers et al. 2020). In a short time, the international community – under the leadership of the G20 – agreed to help poor countries by proposing a suspension of debt service due in the second half of 2020. As part of the Suspension of Service Initiative debt (DSSI), participating countries can ask their bilateral lenders to defer debt service repayments for three years without affecting the net present value (NPV) of public debt. The size of the liquidity provision under the DSSI is not negligible. For all eligible countries, it stands at $ 10.2 billion and represents around one-fifth of the budget deficit due to the Covid-19 shock. However, many eligible countries have so far been reluctant or refused to participate in DSSI. It may seem like a confusing answer to what at first glance is free money in times of great need. Yet these countries fear that participation in the DSSI may signal debt sustainability issues that could trigger sovereign ratings downgrades and higher sovereign borrowing costs.1

In a recent article (Lang et al. 2020), we provide a first assessment of the short-term impact of DSSI on sovereign bond spreads. In particular, we test whether the potential benefits of providing short-term liquidity outweigh the stigma effects that may be associated with participating in the debt relief initiative. Estimating the effect of debt relief on sovereign bond spreads is generally difficult, as debt relief initiatives are generally not attributed to chance. Comparing debt relief recipients to other countries is therefore not instructive. However, the case of the DSSI makes it possible to construct plausible counterfactuals. Unlike most debt restructurings, the DSSI was announced simultaneously for the 73 eligible countries and, therefore, was not tailored to the needs of each country. In addition, the eligibility criteria were based on pre-existing income thresholds rather than financing needs or the severity of the shock, which crucially influence borrowing costs.

Sovereign borrowing costs fell by around 300 basis points

We use this event to analyze its impact on the spreads of sovereign bonds of the 16 countries eligible for DSSI with access to the international market and daily data available. We have used the Synthetic Control Method (SCM) developed by Abadie and Gardeazabal (2003) and now increasingly used in similar contexts (see Marchesi and Masi 2020). For each country eligible for DSSI, we build a synthetic control (or “doppelganger”) combining countries from a pool of middle-income countries not eligible for DSSI.2

Figure 1 shows our main result. The comparison of the spreads of the sovereign bonds of the countries eligible for the DSSI with their synthetic controls shows that the sovereign spreads decreased considerably after the debt relief. Several days after the DSSI announcement, spreads in eligible countries were down about 300 basis points (bps) more than in comparable untreated doppelganger countries. This average effect differs from country to country, but it is negative for all borrowers eligible for debt relief. This result is robust to the different specifications of the model, including the generalized synthetic control method (Xu 2017). In addition, a set of placebo tests in space and time shows that the effect on spreads is due to the DSSI and cannot be explained by the (contemporary) demand of an IMF program.

Figure 1 Spreads of sovereign bonds in DSSI-eligible countries compared to their synthetic controls

Remarks: The figure represents the difference between the real spreads of sovereign bonds and those of the synthetic control (spread gap) for the countries eligible for the DSSI. The solid red line is the average of the country specific spreads. Solid gray lines refer to countries that joined the DSSI on September 17, 2020, while dotted gray lines refer to countries that have not officially applied to join the initiative (Ghana, Honduras, Kenya, Mongolia, Nigeria and Uzbekistan). The vertical lines indicate the announcement of the DSSI on April 15, 2020 (solid line) and the first participation in the DSSI on May 1, 2020 (dotted line). The dots indicate the participation of each country in the DSSI. See description in main text. Source: Bloomberg, Our World in Data and IMF World Economic Outlook.

The fall in spreads seems to be due to the provision of liquidity

To discriminate between two mechanisms that could drive the results, we test the heterogeneous effects of debt relief. We focus on two sources of heterogeneity – the size of DSSI relief and the share of private creditors in debt service – and estimate their effects in a difference-in-differences framework using the projection method. local. This analysis shows that the decline in bond spreads for DSSI-eligible countries is greater for countries that have a higher share of debt service due during the eligibility period (between May and December 2020, graph 2, part A). On the other hand, the fall in spreads does not depend on the size of private creditors (Chart 2, Panel B). As there is no increase in spreads, not even for countries that owe a large portion of repayments to private creditors, these results do not support the presence of a stigma effect. On the contrary, the results are consistent with a positive liquidity effect due to the postponement of debt service due in 2020.

Figure 2 Cash flow versus stigma

A) Size of DSSI relief

B) Share of private creditors

Remarks: The figures plot the impulse response functions of the differential effect of the DSSI announcement (t = 0) between eligible and non-eligible countries on sovereign bond spreads. Panels A and B divide the sample between eligible countries that have benefited from DSSI relief greater or less than 0.5% of GDP and those whose debt service due to private creditors is greater or less than 60% of the total debt service due under the DSSI (the two thresholds are median values). See description in main text. Data source: Bloomberg and IMF World Economic Outlook.


The international community is currently discussing the possibility of extending the current initiative to suspend debt service in developing countries until 2021. Our results suggest that this simple moratorium on neutral NPV debt – involving no discount for creditors – can effectively help countries overcome the crisis.

Our findings also add to the larger literature on debt restructuring. They show that rapid and unconditional debt rescheduling to countries facing short-term liquidity shocks can be an effective instrument of financial support that can help avoid severe defaults (Trebesch and Zabel 2017). In addition, our results support the design and adoption of simple conditional government debt instruments with floating grace periods to help poor countries mitigate their exposure to negative shocks (Cohen et al. 2008).

Two final qualifications are important. First, our results could be generalized to other situations where countries face a short-term crisis. In the presence of severe negative shocks, only the deferral of debt service could help reduce borrowing costs. However, this does not mean that the suspension of debt service will be the optimal response to the Covid-19 crisis in the months to come. If the shock persists, the liquidity crisis could evolve into a solvency crisis, as a change in the long-term growth rate of the economy would affect debt sustainability. In such a scenario, a reduction in the debt stock might be necessary to reduce debt distress and restore debt sustainability. Second, our analysis focuses on NPV neutral debt relief provided by the public sector. How the markets would react if private creditors also joined the initiative (as requested by the G20 and major international financial institutions) remains an open question.

The references

Abadie A and J Gardeazabal (2003), “The Economic Costs of Conflict: A Case Study of the Basque Country”, American Economic Review 93 (1): 113-132.

Bolton P, L Buchheit, PO Gourinchas, M Gulati, CT Hsieh, U Panizza and B Weder di Mauro (2020a), “Born of Necessity: A Debt Stop for COVID-19”, CEPR Policy Insight n ° 103.

Bolton P, M Gulati and U Panizza (2020b), “Legal air coverage»,, October 13.

Bulow J, C Reinhart, K ​​Rogoff and C Trebesch (2020), “The debt pandemic», IMF Finance and Development, Fall.

Cohen, D, H Djoufelkit-Cottenet, P Jacquet and C Valadier (2008), “Lending to the Poorest Countries: A New Counter-Cyclical Debt Instrument”, Working Paper 269, OECD Development Center.

Djankov S and U Panizza (2020), “COVID-19 in Developing Economies: A New eBook»,, June 22.

Cor S, C Reinhart and C Trebesch (2020), “China’s foreign lending and the looming developing country debt crisis»,, May 4.

Landers C, N Lee and S Morris (2020), “Over $ 1 trillion in MDB firepower exists as COVID-19 ‘shattering glass’ moment approaches”, Center for Global Development.

Lang V, D Mihalyi and AF Presbitero (2020), “Debt relief, liquidity provision and sovereign bond spreads”.

Marchesi S and T Masi (2020), “Debt restructuring during COVID-19: private and official agreements»,, May 4.

Trebesch C and M Zabel (2017), “The output cost of hard and soft sovereign default”, European Economic Review 92: 416-432.

Xu Y (2017), “Generalized synthetic control method for causal inference with cross-sectional time series data”, Policy Analysis 25: 57-76.

End Notes

1 See reports from international institutions (IMF 2020, World Bank 2020), Think Tanks (ODI 2020) and press articles in The Economist and Reuters, among others. More details on DSSI can be found here and on the World Bank website.

2 Since the dynamics of sovereign spreads depend on fiscal and economic performance, we take the growth of real GDP, the current account, the fiscal balance and the public debt (all in shares of GDP) as macroeconomic variables to construct the synthetic control. . Additionally, to compare countries with similar bond spread dynamics before DSSI, we match the spread levels to specific dates. Finally, to take into account the differences in the intensity of the Covid-19 crisis, we use the number of cases per inhabitant. See Lang et al. (2020) for more details.

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Student debt relief company ordered to repay and cease operations in North Dakota

BISMARCK – North Dakota Attorney General Wayne Stenehjem has ordered Student Loan Services LLC to reimburse clients in the state and to stop doing business here.

The California student debt relief company is not licensed in North Dakota, and Stenehjem says it cannot operate in the state until it is in full compliance with the law. state licenses. Debt relief companies must be licensed by the North Dakota Department of Financial Institutions and post a bond with the state.

The attorney general’s consumer protection division investigated the company after a woman who paid the company nearly $ 900 filed a complaint, saying she had not received services for several months after the start of payments. The company had taken no action to reduce its student debt, according to Stenehjem’s office.

Student Loan Services, which had contracts with 18 people in North Dakota, agreed to cancel all of those contracts and reimburse anyone who asks. The company is prohibited from soliciting new clients in the state until it complies with licensing requirements.

Student debt relief companies charge fees to help reduce or eliminate loan payments and customer debt by enrolling customers in federal student relief programs. Almost all of the services offered by these companies can be provided for free.

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Paris Club debt relief accelerates after G20 deal clarified – France

PARIS, May 19 (Reuters) – The number of countries receiving Paris Club debt relief this year under a deal with the G20 is expected to rise after the Club – a group of state creditors – clarified the conditions, said a source from the French finance ministry. Tuesday.

The Group of 20 Major Economies and the Paris Club, an informal group of state creditors coordinated by France’s finance ministry, agreed last month to freeze the debt payments of the 77 poorest countries this year in order to free up money to enable them to fight the coronavirus pandemic.

However, some debtor countries have been reluctant to sign, fearing it could hurt their credit rating after rating agencies said a default by private creditors who agreed to suspend debt payments alongside it. the Club could be considered a fault.

Kenya’s finance minister told Reuters last week that this was one of the reasons Nairobi would not apply.

So far, the Paris Club has only signed agreements with the Caribbean islands of Dominica and Grenada, as well as with Mali and Nepal, the French source said.

But the Club has now made it clear that candidate countries can specify that they want relief only on their debts to public creditors.

“We have about 20 more in the process of finalizing documents to sign agreements and we expect another dozen to make requests in the coming days,” the source said.

Countries likely to sign soon are Cameroon, Democratic Republic of Congo, Republic of Congo, Ethiopia, Pakistan and Mauritania, another source close to the matter said.

Usually, the Paris Club asks borrowing governments to seek the same terms for debt repayment from private sector creditors.

Aside from this exception to this rule, rating agencies now understand that the debt relief program is not negative for ratings, the source said.

Countries eligible for the program have a total of $ 36 billion due this year, made up of $ 13 billion owed to other governments, $ 9 billion to private creditors and the remainder to multilateral development lenders. (Reporting by Leigh Thomas; Editing by Kevin Liffey)

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IMF’s Georgieva Says Private Creditors and China Must Fully Participate in Debt Relief

FILE PHOTO: IMF Managing Director Kristalina Georgieva speaks at a Vatican-hosted conference on economic solidarity, Vatican City, February 5, 2020. REUTERS / Remo Casilli

WASHINGTON (Reuters) – International Monetary Fund Managing Director Kristalina Georgieva on Wednesday called for increased involvement of private creditors and China in debt relief for poor countries, saying this was the key to her success and a potential framework for debt restructuring.

Georgieva told a press conference that the participation of private creditors in a program to suspend debt service for poor countries was largely non-existent, with only three of the 44 countries on the program reaching private creditors.

An IMF spokesperson said the total had recently increased to 43 countries when the heavily indebted Mozambique joined the program. here which suspends payments on official bilateral debt until June 2021.

“What we have seen, unfortunately, is that the private sector has been reluctant, and countries themselves have been reluctant to ask the private sector (for debt relief) for fear that it may erode their future market access. . The access they got the hard way in previous years, ”Georgieva said.

She added that only some of China’s official lending entities participated.

“What we’re also hearing from China is that it recognizes that it is a relatively new creditor, but that it is a very large creditor and that it needs to mature domestically in terms of managing its own lenders, coordinating between them, “said Georgieva. .

Reporting by David Lawder; Editing by Christopher Cushing

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Poorest countries to save $ 12 billion in debt relief in 2020 (World Bank)

NEW YORK (Reuters) – The world’s poorest countries could save more than $ 12 billion owed to sovereign and other creditors this year thanks to their participation in a debt relief program, with Angola alone saving some $ 3.4 billion, according to estimates released Friday in a new World Bank database.

Savings from the COVID-19 Debt Service Suspension Initiative (DSSI) will be short-term, as the initiative only provides for the suspension of debt payments until the end of the period. the year. It defers these payments to a later date but does not cancel them outright.

The second saver among DSSI-eligible countries would be Pakistan, with $ 2.4 billion, followed by Kenya with $ 802 million, the data shows. here.

In terms of savings relative to gross domestic product, Bhutan would reap the most benefits from the plan with 7.3% savings on GDP, followed by Angola at 3.7% and Djibouti at 2, 5%.

In addition to the estimated savings of each country, the database includes details on debt to multilaterals like the International Monetary Fund as well as official and unofficial bilateral debt disbursed and debt service owed per year.

IMF and World Bank officials have warned that the COVID-19 pandemic will hit developing and emerging markets particularly hard given high debt levels, sharp drops in the prices of oil and other commodities and inadequate health systems.

The DSSI is supported by the G-20, the World Bank, the IMF and the Paris Club of sovereign lenders. The database offers a new level of transparency on debts and creditors, including China, which has emerged as one of the largest creditors in Africa and elsewhere over the past two decades.

The Jubilee Debt campaign estimated that canceling debt payments from poor countries, including to private creditors, would free up more than $ 25 billion for countries this year, or $ 50 billion if extended until in 2021.

The United Nations, many African countries and civil society groups have called for debt relief to be extended for two years to allow countries to recover more fully from the economic shock of the pandemic.

Reporting by Rodrigo Campos and Andrea Shalal; edited by Jonathan Oatis

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G20 prepares limited extension of debt relief for poorest countries

Updates on the economic impact of the coronavirus

The G20 rich country group is preparing to extend its debt relief offer to the world’s poorest countries until next year, but faces growing criticism for its limited ambition in the face of a growing crisis in emerging economies.

G20 ministers will meet at this week’s annual meetings of the IMF and World Bank on Wednesday, when they are expected to announce a six-month extension of the group’s Debt Service Suspension Initiative (DSSI) under from which 73 eligible countries can apply to G20 governments and their political banks to defer debt repayments due this year and spread them over four years.

The initial initiative was announced as the pandemic took hold around the world this spring, to offer short-term relief to poor countries struggling to meet immediate health, social and economic costs.

But, if confirmed, the extension will be less than requested by recipient countries.

A meeting this month of the United Nations Economic Commission for Africa, the Institute of International Finance which represents private sector creditors and a group of African finance ministers called for the ISDB to be extended until the end of 2021.

The G20 has also been criticized for failing to take into account the views of debtor countries.

A statement released after the meeting said “all stakeholders, including debtor countries and the private sector, should have a seat at the table and their views should be taken into account.”

Stephanie Blankenburg, head of debt and development finance at the United Nations Conference on Trade and Development, said: “There is an agreement between the advanced and developing countries of the G20 to represent only the interests of creditors. . We are absolutely not talking about how the debtor countries could receive their proposals. ”

In particular, she criticized a separate G20 plan for over-indebted poor countries, which will consider cuts and write-downs on a case-by-case basis next year.

It makes the relief of the G20 countries conditional on debtor countries seeking the same treatment from private creditors, including commercial banks and bondholders.

Ms Blankenburg said: “This places a huge burden on eligible developing countries, which tend to be small and poor.”

David Malpass, president of the World Bank, also criticized the efforts of the G20.

Speaking on Tuesday, he said that “the G20 is a forum primarily for creditors and he has been reluctant to move forward with the broader theme [of debt relief]”.

“Bilateral creditors are looking to get as many repayments as possible,” he said. Mr Malpass has repeatedly criticized G20 members for not fully participating in the initiative.

According to the IMF, 44 countries have applied to participate in the DSSI, deferring about $ 5.3 billion in repayments this year, less than half of the potential savings of $ 11.5 billion estimated by the World Bank.

The amount carried forward represents about a tenth of the increase this year in the external financing needs of the 73 countries eligible for the DSSI, estimated by the IMF at around 54 billion dollars.

Of the 44 countries that have used the DSSI, only three have requested comparable treatment from private creditors and no agreement has yet been signed, according to the IMF.

Mr. Malpass also criticized China’s partial involvement in the DSSI. Some Chinese creditors rescheduled principal payments but continued to collect interest, with deferred debt still subject to interest “so this will increase the debt burden of poor countries rather than ease them,” he said. declared.

China has become the main lender to many poor countries around the world in recent years. World Bank data released this week shows that its share of debt owed by the 73 countries in the DSSI fell from 45% in 2013 to 63% at the end of last year, when the combined debts of the 73 countries amounted to $ 744 billion.

China has been criticized for treating its large strategic banks as commercial rather than public lenders, meaning they have a choice of whether or not to participate in DSSI. China says it is a full participant in the DSSI and has provided nearly half of the relief negotiated so far this year.

This article has been modified after publication to correctly reflect the magnitude of countries’ borrowing needs.

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Former ITT Tech students in Mississippi to receive debt relief as part of their settlement


JACKSON, Mississippi (WJTV) – Mississippi Attorney General Lynn Fitch announced that the state has reached a deal to get $ 1,763,071.28 in debt relief from former ITT Tech students in Mississippi. The funds are part of a settlement with 48 attorneys general and the Federal Consumer Financial Protection Bureau.

“Today’s settlement will bring more than $ 1.7 million directly into the pockets of students targeted by the predatory actions of PEAKS Trust, many of whom continue to suffer the economic impacts of astronomical interest rates,” said Fitch. “This regulation should serve as a warning to other bad actors who take advantage of financially vulnerable Mississippians. My office will continue to seek justice, ensuring that there are serious consequences for illegal actions against consumers in our state. “

The settlement is with PEAKS Trust, a private lending program managed by ITT and affiliated with Deutsche Bank entities. PEAKS was formed after the 2008 financial crisis when the private sources of loans available to for-profit colleges dried up.

ITT had operated campuses in Madison, Mississippi. The for-profit college worked out a plan with PEAKS to provide students with temporary credit to cover the gap between tuition fees and federal student aid and the total cost of education. ITT filed for bankruptcy in 2016 following investigations by state attorneys general and following action by the US Department of Education to restrict ITT’s access to federal aid to students.

Students will not have to do anything to benefit from debt relief. The notices, which will be sent directly to those affected, will explain their rights under the regulation. Students can direct questions to PEAKS at [email protected] or 866-747-0273, Where the Consumer Financial Protection Bureau at (855) 411-2372.

In June 2019, Mississippi was also part of a $ 168 million settlement that relieved the debt of 18,664 former ITT students. This deal was made with Student CU Connect CUSO, LLC, which also offered loans to fund student tuition at ITT Tech.


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It’s Time to Cancel Student Debt and Make Higher Education Free | Education

The COVID-19 epidemic is about to devastate the economy of the United States. It has already led to unprecedented levels of poverty and unemployment. At this rate, the economic fallout from the pandemic will likely be the worst recession since the Great Depression of the 1930s. To truly cope with the looming economic crisis, the US government will need to provide tremendous relief that puts people first, not people. profit.

A major step in that direction could be the cancellation of the $ 1.56 trillion in student loans, which would help millions recover once the pandemic is over. Making public colleges, universities and trade schools free would also help those hard hit by the crisis rebuild their futures and prevent another student debt crisis from emerging.

For marginalized communities of color, who will bear the brunt of the social and economic devastation the pandemic will leave behind, and for those who were already financially precarious before the outbreak, the need for such measures is more urgent than ever.

Crush Debt and Inequality

Over the past 15 years, student debt has more than quadrupled, from $ 345 billion in 2004 to nearly $ 1.56 trillion in 2020. That’s half a trillion more than credit card debt, which now stands at $ 1,000 billion.

Across the country 69 percent of students take out loans to pay for tuition and other school expenses, and by the time they graduate, they owe an average of nearly $ 30,000.

Today, even though women make up 56% of university graduates, they hold almost two-thirds of all student loan debt amounting to $ 929 billion.

Student debt also weighs disproportionately on students of color, whose communities have historically encountered many barriers to pursuing higher education. Some 85 percent of black high school graduates have loans to pay after graduation, compared to 69 percent of their white counterparts. Black students have an average of $ 34,000 in student debt, which is $ 4,000 more than white students.

On average, white and Asian students graduate from college at a rate of about 20 percentage points more than Hispanic and black students.

Black communities and other marginalized communities of color are disproportionately impacted also by predatory lenders. Private loans for colleges tend to be the last resort when federal scholarships, grants, and loans can no longer cover expenses. These particular loans often come with high interest rates and rigid payment plans. Students then leave college debt-ridden and without a degree to provide them with a pay raise to help them pay off their loans.

According to American Association of University Women (AAUW), 57% of black women paying off student loans were unable to afford essential expenses.

So instead of being an equalizer that helps close the wealth gap between rich and poor, higher education in the United States breeds inequality. It increases the indebtedness of communities which already suffer from high levels of income insecurity and economic precariousness.

It reinforces the cycle of poverty and the paycheck-to-paycheck life that many marginalized families are forced to experience, even though they are more educated. Parents with a university degree and heavily in debt are unlikely to be able to afford higher education for their own children.

The economic fallout from the pandemic threatens to worsen this situation.

Free education

Some student debt relief measures have already been taken.

On March 19, Senate Democrats proposed a plan to write off $ 10,000 federal student loan debt for all borrowers, which was backed by alleged Democratic presidential candidate Joe Biden.

On March 23, House Democrats, led by Congressmen Ilhan Omar and Ayanna Pressley, introduced the Emergency Student Debt Relief Act, which proposes to write off $ 30,000 in student loans. all borrowers and requires the US Department of Education to pay all remaining federal loan payments for the remainder. of the outbreak.

In addition to the House and Senate bills, which are yet to be voted on, Congress passed the CARES Act on March 27, which effectively froze student loan payments and accrued interest rates on federal loans. .

But the measures must go further. Freezing payments and even canceling $ 30,000 in loans per person would still leave millions of Americans indebted, including many medical workers on the front lines of the fight against COVID-19.

The CARES law also does not apply to students who have taken out loans from private lenders (which total $ 124 billion) and some companies are suing for debt collection amid the pandemic.

To truly cope with the current crisis in higher education, especially in the midst of the COVID-19 pandemic, student debt needs to be wiped out completely. And to ensure that another student debt crisis does not emerge in the future, all public colleges and trade schools must be free from tuition and debt.

This is not a far-fetched idea and in fact, many colleges in the United States were tuition-free in the past. In California, for example, students from the state did not have to pay tuition fees at public universities until the 1970s.

Student loan debt cancellation and free tuition have already been gain public support in large part because of Senator Bernie Sanders’ 2020 presidential campaign.

Some states have piloted tuition-free programs, but among these, eligibility criteria exclude large numbers of students. In 2017, New York State established SUNY and CUNY Schools for families earning less than $ 125,000 in tuition. In 2018, New Jersey also made community colleges free, but only 13,000 people qualified according to the program’s eligibility criteria.

But the struggle to create a just higher education system should not end with debt cancellation and free tuition. To ensure that students can eat, pay rent, buy books, and navigate life outside of the classroom, federal Pell Grants, which provide funds to students in need, must be increased and their eligibility expanded. Pell grants, scholarships and tuition-free education should also be extended to those currently and formerly incarcerated.

Banks and private lenders have been allowed to benefit from this abusive and unfair system of financing education for far too long. In 2008, when the Great Recession hit, President George W Bush enacted the Troubled Asset Relief Program, allowing the US Treasury to spend taxpayer dollars to buy failed bank assets to bail out the financial system, paving the way for a bailout valued at $ 16.8. and $ 29 trillion.

A total student loan forgiveness would cost between 5-9% of that amount and can easily include the wiping out of the $ 124 billion owed to private lenders. Free tuition at public post-secondary institutions is estimated to be around $ 79 billion a year, which is affordable. In addition, increased access to higher education would lead to increased tax revenues generated by a larger population of better paid university graduates. With the advantages it generates, free education would end up pay for himself.

As the US government prepares to bail out big business again, the time has come to demand real education reform – one that makes it free.

The cancellation of all federal student loans will help alleviate already existing economic stressors. Free education will help society as a whole – and in particular the most disadvantaged – to recover from centuries of inequality that will only get worse because of the coronavirus epidemic.

Everyone deserves to live a life of dignity and the opportunity to realize their full potential. It is time for the US government to invest in the American people, not in financial institutions that concentrate wealth and contribute to national and global inequalities.

The opinions expressed in this article are those of the authors and do not necessarily reflect the editorial position of Al Jazeera.

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Los Angeles leads in reducing consumer utility debt

Co-written by Yeshi Lemma, Los Angeles Alliance for a New Economy (LAANE)

The city of Los Angeles is taking action to address crippling debt accumulated by low-income utility customers during the COVID-19 pandemic. It plans to pay $ 50 million in COVID relief funds to some customers to cover debts incurred during COVID.

Energy load in Los Angeles

While the city’s moratorium on water and power cuts was a critical first step in maintaining Angelenos’ access to water and electricity during this public health and economic crisis, it this is only a temporary measure. Meanwhile, tens of thousands of Angelenos are out of work and unable to pay their bills. Los Angeles County Unemployment Rate peaked at 20.6 percent in May, and although it has since declined to 15.1%, people of color in California disproportionately affected by COVID 19 layoffs.

While 27% of white workers in the state have filed for unemployment insurance since March, 28% of Latinx workers and 31% of Asian workers have done the same. For black workers, the number was a staggering 46 percent. With such disparate unemployment, low-income communities and communities of color will likely bear the heaviest burden from high utility bills and unpaid balances.

But Los Angeles is trying to provide relief. The city will use funds from the Coronavirus Aid, Relief and Economic Security Act (CARES) to fund a utility subsidy program that will provide cash assistance that up to 100,000 low-income customers can use to pay their water and electricity bills.

The RePower THE Coalition, (over 30 community, labor, environmental and environmental justice organizations) have called on the Los Angeles Department of Water and Electricity (LADWP) to start planning when the moratorium is lifted. Without a plan, a wave of disconnections and indebtedness would be imminent for many low-income Angelenos at a time when water and ar electricitye more important than ever.

LADWP’s Council of Commissioners and staff understood the unprecedented opportunity to give Angelenos a fresh start by providing much-needed relief to low-income clients.

Long-term energy load

Although the grant program is a direct response to the pandemic, Angelenos needs more innovative solutions to address the long-standing problem of utility debt and the “energy burden” for Angelenos. Energy load, which refers to the total share of income a household spends on electricity bills, is a racial and economic justice issue that has disproportionately impacted low-income communities and communities of color before even the pandemic.

A study found that the median household energy load in Los Angeles was 2.75%, but 40% of black households and 30% of Latinx households paid more than double that amount. During the pandemic, these inequalities were exacerbated, with 28 percent of Angelenos facing serious problems paying their utility bills.

How is the City taking additional steps to settle the debt?

Until recently, there were no plans to offer debt relief to low-income customers, many of whom have accumulated more since the start of the pandemic and they have had to choose between paying for utilities or for food. and drugs.

The Low Income Discount Program (LIDP) and LADWP’s Lifeline programs, both of which offer discounts on bills to eligible customers, will not be enough to help households whose financial situation has worsened during the pandemic. Information on how debt affects customers is not readily available, but there is currently a proposal at the National Water Board that would require some water utilities, including DWP, to report total arrears. customers and individual customer debt ranges to the government in November. Assuming that new unemployed low-income customers couldn’t make their payments in the five months, LIDP and Lifeline participants likely racked up at least $ 18 million in unpaid bills (based on LA County Unemployment Rate March-September 2020 and the average costs of LIDP / Lifeline invoices as estimated by the LA City Controller).

Concerned about the situation, the city council adopted by an overwhelming majority a movement through Chairman of the Board Nury Martinez ask LADWP to report on a debt relief and cancellation program for low income clients.

His motion also included bill stabilization measures for low-income customers, where payments will be based on a percentage of monthly income, helping to prevent debt from increasing on their utility bills.

Utility Subsidy Program

The city of Los Angeles has received more than $ 694 million from the CARES Act, which Congress passed in response to economic hardship caused by COVID-19. To direct the funds, the Council created an ad hoc committee on COVID-19 Recovery and Neighborhood Investment, which has allocated $ 50 million for LADWP client bill relief. Due to federal restrictions, CARES Act funds cannot be used to make up for lost income and can only be used for direct relief. Therefore, the utility subsidy program will provide cash assistance directly to clients. Eligible customers who register for the program will be entered into a lottery. Those selected will receive a check for $ 500 to cover their debt. Customers will have to receive these funds by the end of the year or the funds will disappear.

While this program would provide much needed relief, the LADWP Board of Directors recognizes that more is needed, we look forward to hearing how DWP will rise to the challenge.

Give the example

Municipal electric utilities don’t have as many tools and resources to manage debt as their investor-owned counterparts. As such, municipal utilities across the country are struggling to find creative ways to deal with the growing debt created by customers facing unprecedented financial hardship due to COVID-19. Managing municipal utility debt means leadership must think outside the box and create new ways of dealing with it.

There are approximately 3,300 electric utilities in the country. Through courageous and creative leadership, we hope the biggest in the country can lead the way and show other utilities how to put customers first and find more innovative ways to deal with customer debt than they do. they serve.

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Natural Light’s Da Vinci Debt Surpasses Da Vinci As The Most Expensive Artwork In The World

Da Vinci of Debt celebrates the return of the Natural Light College Debt Relief program, launched in 2018. Each year, the program offers $ 1 million to help those burdened by the debt burden. Now entering the fourth year of his ten years, 10 million dollars engagement, Natty discloses the “highly ranked” plan behind his $ 100 rentals of diplomas in 2020 as he unveils the magnificent exhibition.

“The art world is filled with absurd price tags that most people find impossible to justify,” said Daniel blake, vice president of value brands at Anheuser-Busch. “This is what made it the ideal medium for this campaign. It’s a very apt analogy for the exorbitant cost of attending a typical four-year college. Da Vinci of Debt, we hope to inspire action around the college debt crisis and get more fans to participate for a chance to see Natty College’s debt relief program pay off their student loans. ”

Only in the art world can a single banana sell $ 120,000 and used linens from an artist go for $ 150,000. While other works of art like these are valued arbitrarily, the value of Da Vinci of Debt is derived from the average total cost ** of a four-year college education. The result is a work of art valued at $ 470 million, surpassing the most expensive work of art ever sold at public auction – Salvator Mundi, a 600-year-old Da Vinci painting that sold $ 450 million in 2017.

The design of the artwork is a fascinating collection of real diplomas, suspended in the air as if a gust of wind had dispersed them throughout the cavernous 6,000 square foot space of Vanderbilt Hall in Grand Central Terminal. The design aims to illustrate both the scale of the crippling debt crisis while also alluding to the chaotic impact college debt creates on those burdened with it. Each diploma has been carefully molded in place and brilliantly suspended using an intricate network of cables.

US university debt snowballing to a new record in 2021: $ 1.7 trillion* in total debt, and the average graduate pays more $ 180,000 ** By the time their degree is in hand, Natural Light is appealing to funds from the fine art world to view its exhibition and is open to entertaining bidders on the historic artwork.

“If that means giving more people the opportunity to enjoy the college experience without the debt that comes with it, we’re all ears,” Blake said. “Natty is committed to doing everything in our power to provide real solutions to college debt, and if there’s a serious bidder, you know where to find us… @naturallightbeer.”

The installation is in residence for a limited time in new York at Vanderbilt Hall at Grand Central Terminal from January 14-16, 2021. A complete gallery of the installation will be visible virtually at

In addition to the installation at Grand Central Terminal, Natural Light has partnered with Snap Inc. to replicate the Da Vinci of Debt in augmented reality (AR) making it accessible to anyone aged 21 and over via Snapchat. Using the Natural Light AR lens, Snapchatters can view and explore the exhibit virtually by placing it wherever they are and tapping sections of the setup to learn more about the crisis. University Debt in America and the Natural Light College Debt Relief Program.

In 2021, Natty is back with another $ 1 million in debt relief. Fans can tell Natty what prompted them to go to college for a chance to see Natty pay off his debt. Natty Light will accept entries using #NattyStories and #Contest from From January 11 to March 21, 2021. The complete contest rules are available on For more, follow @naturallight on Twitter and Facebook, @naturallightbeer on Instagram.

* Source: Federal Reserve report g.19
** Source: Student Loan Hero

No purchase necessary. Open to residents of the United States who are twenty-one (21) years of age or older at the time of enrollment and who have enrolled in an accredited college or university in United States within fifteen (15) years preceding the date of entry. Begin 1/11/21 and ends on 03/21/21. See the official rules on for prices and details. Message and data rates apply. Void where prohibited. ENJOY RESPONSIBLY © 2021 Anheuser-Busch, Natural Light® Beer, St. Louis, Missouri

Natural Light was introduced in 1977 as Anheuser-Busch’s first low calorie light beer. Currently America’s sixth best-selling beer, Natural Light is brewed with a blend of premium hops and a combination of selected grains producing crisp flavor, light body and satisfying refreshment.

For over 165 years, Anheuser-Busch has carried on a heritage of brewing high-quality, flavorful beers that have satisfied beer drinkers for generations. Today, we own and operate 23 breweries, 14 dealerships and 23 agricultural and packaging facilities, and have more than 18,000 colleagues across United States. We are home to several of America’s most recognizable beer brands including Budweiser, Bud Light, Michelob ULTRA and Stella Artois, as well as a number of regional brands that offer beer drinkers a choice of the tastiest craft beers in the world. industry. From responsible drinking programs and emergency drinking water donations to cutting-edge sustainability efforts, we are guided by our unwavering commitment to supporting the communities we call home. For more information visit or follow Anheuser-Busch on LinkedIn, Twitter, Facebook and Instagram.

SOURCE Natural Light

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Black farmer to receive $ 5 billion in COVID relief bill: “400 years past due”

President Bidenthe allocation of $ 5 billion in the American rescue plan (ARP) has the Republican Senator Lindsey graham from South Carolina upset. Well, the most accurate term for his anger is that he has a tantrum about the amount of money set aside for Black Farmers to help them survive.

Overall, $ 10.4 billion is earmarked for farmers across the country and half of that goes to black farmers. John boyd, head of the National Association of Black Farmers, says these billions are needed to help sustain and revive a dying industry. Boyd acknowledges, “We are frankly facing extinction. If we can’t involve a new generation of young people in farming and farming, black people and other farmers of color in farming, you won’t see it.

(Photo by Dan Kitwood / Getty Images)

Read more: State status for DC could arrive sooner than Puerto Rico – here’s why

Counting the number of black farmers in this country right now, he says that “46,000 black farmers remained in this country according to the US census. We lost a million farm families at the turn of the century. And we were killing 20 million acres of land. We’re down to about four and a half million acres of land.

While Senator Graham is vocal about his dissatisfaction with the assignment calling it reparations for black farmers, John hope bryant, the founder and head of Operation Hope, says it’s “a long time ago and over 400 years behind. You can’t compare it to white farmers because black farmers were the only ones enslaved. It’s not just about COVID, but it’s the right thing to do. ”

Black farmers have had their share of ruin and financial devastation at the hands of the US government. During the 1990s, black farmers filed a lawsuit against the United States Department of Agriculture (USDA) for discrimination in the loan program. Then president Bill clinton authorized payment for discriminatory practices for black farmers.

However, full restitution was not paid until Obama’s presidency.

ARP legislation provides another $ 1 billion fund to help USDA end systemic racism, provide technical and legal assistance to farming communities of color, and fund underfunded programs that will shape the future farmers and communities of color.

Read more: Vernon Jordan paved the way for black leaders in business and politics

USDA Senior Advisor on Race Actions Dewayne Goldmon says the money targeted for the USDA is significant “debt relief” for farmers who have been “long underserved.” According to Goldmon, this is an attempt at fairness.

Florida agriculture takes precautions for workers amid COVID-19 pandemic
Workers pick tomatoes at a farm owned and operated by Pacific Tomato Growers on February 19, 2021 in Immokalee, Florida. The workers, who are in the country on an agricultural visa, are mostly from Mexico. (Photo by Spencer Platt / Getty Images)

The ARP language for how debt relief will be promulgated by the USDA for black farmers is still under development.

However, Goldmon, a farmer from Arkansas himself, reveals from a farmer’s perspective, “Agriculture is a very capital intensive profession.” Most farmers affected by ARP will have access to three or four different types of USDA loans. This plan focuses on farmers who have operating loans, equipment loans and farm property loans.

Goldmon believes that if done right it “should make black farmers sustainable producers.”

The $ 1 billion USDA fund will include:

· Grants and loans to improve access to land and resolve inheritance issues;

· Support to one or more legal centers focusing on agricultural legal issues of farmers of color;

· Pilot projects focusing on land acquisition, financial planning, technical assistance and credit;

· A racial equity commission and related activities to address systemic racism across the USDA;

· Support for research, education and extension at historically Black colleges and universities and other institutions of higher learning that historically serve communities of color;

· Scholarships for land grant universities in the 1890s and for indigenous students attending land grant institutions;

· Awareness raising, mediation, financial training, capacity building training, training and support for cooperative development, and other technical assistance; and

Assistance to farmers, ranchers or forest owners of color who are former borrowers of agricultural loans and have suffered related adverse actions, or past discrimination or prejudice

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Mayor Lightfoot Launches Signature Chicago Utility Billing Relief Program

CHICAGO – Mayor Lori E. Lightfoot today joined City Comptroller Reshma Soni and Harold Rice, CEO of the Cook County Community and Economic Development Association (CEDA) to launch the Chicago Utility Billing Relief (UBR) Program. The initiative builds on Mayor Lightfoot’s commitment to dismantle the city’s historically regressive structure of fines and fees and will help Chicago’s most vulnerable residents comply with city utility bill payments. The program is designed to reduce the cost of the water and sewer portions of the City’s utility bills, making them more affordable and preventing residents from having to make difficult choices between paying for utilities and paying them. other essential goods and services. Debt relief will be provided to residents who demonstrate an ability to handle low rate bills for one year.

“The Chicago Utility Billing Relief Program is our final step in providing long-awaited financial support to residents who are struggling with their bills, forcing them to choose between paying for their water and other essentials, and in many cases succumbing. debilitating debt, ”said Mayor Lightfoot. “We can no longer afford to hold back their potential or ours. Through this program, Chicago families and communities will now have a path forward to meeting payments, as well as the possibility of full debt forgiveness, helping us build a more equitable, inclusive and better Chicago. optimistic for generations to come. “

The program works in partnership with the Cook County CEDA, which manages the Low Income Home Energy Assistance Program (LIHEAP). It draws on the expertise and experience of CEDA leaders and uses its extensive network of partner organizations to conduct outreach activities and register owners. Owners of single-family homes and two-apartment units in Chicago must have LIHEAP-eligible income to be eligible for the Utility Billing Assistance Program. In addition, the participant must be the owner, reside at the address and have their name on the invoice as a customer. It is important to note that the Utility Billing Relief Program will not require residency documents in accordance with our Welcoming Cities Ordinance. It offers low-income residents of the city of Chicago:

  • A reduced rate on the water, sewer and sewer tax;
  • No late payment penalty or debt collection activity;
  • Debt forgiveness after successfully completing one year with no past due balance.

“CEDA draws on more than 50 years of experience in operations, education and engagement in its partnership with the City and through its work to ensure the continued delivery of high quality services to residents.” , said Harold Rice, CEO of CEDA. “We are committed to working with the City to reduce poverty, revitalize low-income communities and empower residents more than ever before, especially during the unprecedented time we are currently facing. “

The amount of debt related to water utility billing has increased nearly 300% since 2011 with more than $ 330 million in total debt today. This trend parallels the recent increase in water prices, which rose 166% over the same period to account for deferred investments in infrastructure over 80 years old on average. With much of the debt concentrated in many communities in the south and west, Utility Billing Relief is focused on helping these communities.

In late April, the city launched a soft launch of the Chicago UBR program, which focused specifically on residents already enrolled in the LIHEAP program. In the past two months, the City has enrolled 3,315 residents in the UBR program after sending communications to nearly 8,000 homeowners. Chicagoans already enrolled in the program are eligible for $ 2.9 million in debt relief if they remain in compliance with payments for the following calendar year. To carry out this smooth launch, the City worked with CEDA to create a call center to serve residents, send targeted emails to residents, and identify partner host organizations to help residents with questions. ‘enroll in the program.

“The UBR program is another example of our search for solutions to reform regressive policies that have disproportionately impacted our most vulnerable residents,” said Reshma Soni, City of Chicago Comptroller. “We have made progress in relieving the debt burden resulting from antiquated practices that have led to income inequality, and the UBR program builds on those efforts, especially now when so many Chicagoans are crushed by the economic tensions of the COVID-19 crisis. . “

With this program in place, the City will be able to focus its collection efforts on those who can most afford it, and homeowners will continue to be held accountable for paying water bills. In line with other fine and fee initiatives, for those who do not qualify for the reduced rate, residents can choose from multiple plans from a 6, 12, 18, 24, 36 month plan, accessible in line. Whenever a resident stays up to date on payments, they avoid being subjected to debt collection efforts.

The launch of UBR follows Mayor Lightfoot’s efforts to dismantle the city’s regressive fine and fee system and nefarious enforcement practices that have historically had a disproportionate impact on financially troubled communities. Last year, Chicago City Council approved a first fine and fee reform package that included input from dozens of advocacy groups and city departments, all of which were members of the Fines, Fees Collaboration and Access, formed in December 2018 and headed by City Clerk Anna. Mr. Valence.

The City has already brought critical relief to many residents through new practices, including: eliminating municipal sticker debt for those who can least afford it; reduction of excessive late fees on the City Sticker program; the elimination of license suspensions for non-driving offenses; launch of a series of new payment plans that expand debt repayment options; and new avenues to compliance to help eligible residents avoid a number of the devastating consequences of onerous municipal debt – including water cuts, towing and flooding, and more.

Those who may need help settling their debts are encouraged to visit for more information on payment plans, hardship qualifications, and other information related to fines and fees. Residents can sign up for flexible utility bill payment plans online at and those looking for more information about UBR or to register can visit


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AG Becerra urges Secretary DeVos and Acting Secretary Miller to secure interest relief on essential student loans for U.S. veterans

SACRAMENTO, November 11, 2020 – California Attorney General Xavier Becerra today sent a letter to Education Secretary Betsy DeVos and Acting Defense Secretary Christopher C. Miller requesting updates on their efforts to relieve military personnel of their obligation to pay interest on student loans while serving in a combat zone. In 2008, Congress waived all interest charges for direct student loans for military personnel serving on active duty during a war, military operation, or national emergency, and receiving hostile fire or danger allowance. imminent. However, the Office of Consumer Protection estimates that in 2015, military borrowers eligible for the rebate paid more than $ 100 million in unnecessary interest charges on their federal student loans. In today’s letter, Attorney General Becerra urges Secretary DeVos and Acting Secretary Miller to do everything possible to ensure that payments on unnecessary interest charges are automatically refunded and eligible military personnel are protected. against illegal overcharging in the future.

“Today we recognize the service and sacrifice of service members, veterans and their families. These American heroes have stood up for us, so in any way we can, we have to support them ”, said Attorney General Becerra. “Historically, the Department of Education has failed to honor its commitments to our country’s military, including the obligation to provide interest relief on student loans to veterans. Every dollar counts for a serviceman with past due student loan debt. I am seeking information from the Pentagon and the Department of Education to determine whether these agencies are fulfilling their obligations to those who have dedicated their lives and careers to serving and protecting our country. It’s time to turn the corner.

Last November, the Department of Education and the Department of Defense announced a proposed data matching program that would provide automatic debt relief to eligible veterans. Since then, it is unclear whether, and to what extent, this program has been implemented or used to provide repayments or other debt relief to eligible borrowers. In the letter, Attorney General Becerra calls on agencies to confirm whether an automatic debt relief program has been implemented for eligible borrowers. If the program has been implemented, the letter requests a description of the program, as well as critical information regarding the administration and effectiveness of student loan relief for eligible military personnel. If the program has not yet been implemented, the letter asks for an explanation of why and seeks information on the number of borrowers who are eligible for the relief but have not yet received it.

Attorney General Becerra is committed to protecting and supporting our military families. In May 2019, Attorney General Becerra sent a letter urging the Department of Education to pay off student loans for tens of thousands of disabled veterans as part of their service by developing an automatic release program. In June 2020, the Attorney General Becerra filed a complaint against Secretary DeVos and the Ministry of Education for his failure to implement the extended civil service loan waiver program. In addition, in October 2018, Attorney General Becerra sent a letter to the Consumer Financial Protection Bureau Condemning Acting Director Mick Mulvaney for removing the agency’s oversight of lenders under the Military Loans Act. In addition, the Attorney General’s office was instrumental in advocating for an automatic closed-school discharge provision in the Obama-era borrower defense rule, which was passed as a result of a negotiated regulation involving our office, and which provided automatic discharges to student borrowers who had attended the ITT technical institute and Corinthian colleges.

A copy of the letter is available here:

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‘We’re being left behind’: troubled tenants call for debt relief, extended eviction protections

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SAN DIEGO – Tenants struggling to pay their rent are calling on state lawmakers to extend the moratorium on evictions and give debt relief to some tenants and landlords before protections expire at the start of the season ‘next year.

Protesters gathered in the Logan Heights neighborhood near the home of Congressman Ben Hueso, D-San Diego on Wednesday, demanding he act at the legislative level.

Most protesters are struggling to pay their rent, and many say they have lost their jobs. If state lawmakers don’t act quickly, it will become a life-and-death situation for many struggling families, they say.

They are calling on Hueso to defend bills that give debt relief to eligible tenants and landlords and extend protections against evictions, most of which are due to expire on February 1.

Patricia Mendoza was part of the group imploring lawmakers to act.

“We’re probably going to end up living in my little white van, and it’s your worst nightmare, you know, as a parent you have to protect your kids and you have to do whatever you can,” Mendoza said.

As part of the protest, a few dozen community members set up a Posada, a Mexican holiday tradition where actors reenact Mary and Joseph in search of a room at the hostel. It’s a tradition that currently resonates with many local families, including Gabriel Guzman and his family who were kicked out by what he calls a “loophole” in the system.

“I have no idea we’re both unemployed, our kids are coming home from school,” Guzman said of where he and his family will be living next.

Hueso released a statement, which reads in part: “In the next legislative session, I will work diligently with my constituents and fellow legislators to keep a roof over the heads of families and prevent further new ones. deportations in our state. “

But there is a need for relief in the community, protester Carlos Hernandez said.

“Businesses, many big business owners, they’re relieved, they’re getting help,” Hernandez said, “while we – the hardest hit communities – are being left behind.”

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The G20 fails to reduce the debt of poor countries

G20 updates

Support to the world’s poorest countries in the form of debt suspension of the G20 group of rich countries is well below what was expected at the start of the coronavirus crisis, with just $ 5.3 billion in bilateral debt repayments due to be suspended so far this year.

This is far less than the $ 11.5 billion or more expected from official creditors; furthermore, no country has demanded similar treatment from private creditors, despite strong encouragement from the G20 and debt activists.

The G20 released the figure after a meeting of its finance ministers and central bank governors on Saturday, to a scathing response.

David Malpass, president of the World Bank, criticized the group for its lack of debt relief and said more needed to be done.

World Bank data shows that the 73 countries eligible for the G20 Debt Service Suspension Initiative (DSSI) launched in May could delay payments worth $ 11.5 billion this year, and 41 countries have so far requested to do so, for a total of $ 8.8 billion.

This flies in the face of the G20 statement that 42 countries have asked to defer payments worth $ 5.3 billion. Of this amount, nearly $ 2 billion will be reported by China alone, according to a breakdown of the figures seen by the Financial Times.

The total does not include loans from the Development Bank of China, according to the breakdown document, which said that “China encourages CBD to participate in DSSI [as a commercial creditor] under comparable conditions ”.

Mr. Malpass said that “all official bilateral creditors, including domestic banks, should implement the DSSI in a transparent manner. For example, the full participation of the Development Bank of China as an official bilateral creditor is important for the initiative to work.

He said the G20 should do more to ensure transparency and consistent treatment, to “avoid the ongoing secret rescheduling in some countries, such as Angola and Laos, often with undisclosed deadlines and grace conditions.” .

He also urged the G20 to extend the DSSI until next year and move beyond the suspension of debt service and “open the door to consultations on the debt overhang itself and effective means. reduce the net present value of bilateral and commercial public debt for the poorest. countries.”

If so, it would almost certainly make bilateral debt relief conditional on similar treatment by private creditors, which many sovereign borrowers have been reluctant to seek for fear of damaging their creditworthiness and therefore their access to markets. international capital.

Emerging market governments have raised nearly $ 90 billion by selling bonds in global markets since April 1, according to the Institute of International Finance, often at lower interest rates than those available before the outbreak. coronavirus thanks to the trillions of dollars injected into capital markets by the US Federal Reserve and other advanced economies central banks.

Debt activists have reacted with dismay to the G20 statement and the World Bank’s response.

“I am surprised that the World Bank, as one of the stewards of global development, is not seized by a greater sense of urgency,” said Gayle Smith, president of One Campaign and former special assistant to the president Barack Obama.

She said the Bank was taking more debt repayments from poor countries than it was disbursing in emergency loans and should join bilateral creditors in freezing debt service. She also criticized the lack of transparency and confusion over the amounts of debt benefiting from the G20 initiative.

“If I was in my old seat I would be tempted to ask what’s going on in the name of God if we can’t even pin down the numbers,” she said. “As if we needed another reminder that the world doesn’t act globally, here’s another.”

A G20 spokesperson said more debt relief deals could still be reached, so the eventual total amount could be higher.

This article has been edited after publication to note that total debt relief may increase.

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G-20 agrees framework for further debt relief amid COVID-19

The Group of 20 nations, representing the world’s largest economies, announced on Friday that low-income countries hardest hit by the fallout from the coronavirus pandemic could potentially obtain an extension of their debt repayments beyond the mid-2021, and in the most serious cases, a debt write-off.Read also – Karnataka: 20% of beds in public hospitals will be reserved for children to fight third wave of COVID

The G-20 statement, released after a virtual meeting of finance ministers and central bank governors from the group, said countries had agreed on a “common framework” for debt restructuring ” timely and orderly “which aims to treat creditors equally and negotiate debt. case by case. Read also – Center urges people to follow Covid guidelines and avoid mass gatherings in containment areas during festivals | Key points

But he did not specify which creditors would agree to a possible debt cancellation. China, for example, has repeatedly opposed parts of the debt relief plans. The country, considered Africa’s biggest creditor, is reluctant to give up billions owed to it from its politically strategic projects across the developing world as its own economy slows. Read also – Jadavpur University will organize a free vaccination camp for students; Details to be notified soon

The meeting comes a month after the G-20 agreed to suspend $ 14 billion in debt repayment for another six months to support 73 of the world’s most needy countries in their fight against the pandemic.

Developing countries now have until June 2021 to spend on health care and emergency stimulus programs without worrying about exhausting debt repayments to foreign creditors. Although the pause on debt service payments was greeted as a reprieve, experts pointed to the constraints of a program that excludes private lenders like investment firms, banks and bondholders. Without private sector buy-in, economists say emergency funds from poor countries could simply end up in the pockets of other lenders, regardless of the G-20’s concessions.

The group’s new case-by-case approach to debt negotiations unveiled Friday, also endorsed by the Paris Club, a group of mostly Western sovereign lenders, demands a fair burden-sharing “among all official creditors,” suggesting that China and its disparate lending agencies will have to get on board He calls for private creditors to offer debt treatment at least as favorable as that offered by creditor countries.

Mohammed al-Jadaan, Saudi Arabia’s finance minister and chairman of the G-20 this year, hailed the framework as an unprecedented deal and a major breakthrough in the international debt agenda.

Kristalina Georgieva, Managing Director of the International Monetary Fund, echoed the praise, saying the deal would make the involvement of private creditors more likely and increase the sustainability of our action.

Nonetheless, she warned that the debt crisis was not over, adding that we needed additional support through debt relief and new financing. “

The group also announced on Friday that it would meet again next spring to see if the economic and financial situation requires “an extension of the debt suspension for another six months. A repayment schedule of 5 to 6 years can be expected. offered to eligible countries requesting it to individual creditors.

Before COVID-19 hit, much of the developing world, which was already in dire need of doctors and medical equipment, was spending huge portions of its income to service external debt. Now that the pandemic has closed borders, halted tourism, lowered oil prices and wiped out remittances, poverty is increasing and resources are dwindling.

International aid groups have been pushing for more debt relief and partial forgiveness rather than a simple suspension, arguing that poor countries should not cut spending much needed on stimulus packages and under health systems. pressure.

Ahead of Friday’s finance meeting, more than a thousand medical professionals around the world sent a letter to the G-20 urging debt cancellation for developing countries. “It is perverse that poor countries have to pay $ 3 billion a month in debt repayment to rich banks, investment funds or the World Bank, while their populations are sinking further into poverty and destitution, wrote Chema Vera, Acting Executive Director of Oxfam International.

(AP copy)

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Taxi locket owners ask for debt relief from Blasio

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UPPER EAST SIDE, Manhattan – Taxi drivers lined up outside the Manhattan mayor’s home on Friday to demand debt relief.

Homero, a driver and owner of a taxi locket, says they need it.

“This was going to be my retirement because we don’t have a retirement plan, we don’t have 401k,” he said.

Long before the pandemic, crowds of yellow taxi owners were in debt. With the added stress of a health crisis and empty streets, things are even worse.

“The yellow taxi business is in real danger of shutting down all together at this point,” said Bhairavi Desai of the NY Taxi Workers Alliance.

PIX11 News learned on Friday that more than 50 drivers have died from COVID-19. Some taxi owners like Homero have said they haven’t worked since April because of the pandemic.

Outside Gracie Mansion on Friday, taxi drivers stopped to ring the bell.

Their protests began when the city council’s transport committee put the mayor’s administration on the spot. The Taxi and Limousine Commission explained how they have adapted to COVID-19.

“We gave them health and safety advice, reminding drivers to wear masks, to clean vehicles frequently,” TLC commissioner Aloysee Heredia Jarmoszuk said.

The TLC has also linked some drivers to jobs delivering food to hungry New Yorkers. But the drivers said there was still no solution to their most pressing problem.

Owners of yellow taxi medallions still face crushing debt after the drop in the value of their medallions. At the hearing, the drivers shared personal stories.

In January, the city’s Taxi Medallion Task Force said it was time to take urgent and bold action. But the 6,000 locket owners are still waiting for a plan as the city focuses on the pandemic.

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G20 agrees on debt framework to help poor countries affected by COVID

PARIS / TOKYO: G20 finance ministers first agreed on a new common framework for public debt restructuring, anticipating that the coronavirus crisis will leave some poor countries in need of a deep relief.

The COVID-19 pandemic is straining the finances of some developing countries and G20 ministers said on Friday they recognize that more should be done to help them than a current temporary debt freeze, which will be extended until June 30, 2021.

Major creditors, including China, will need to follow common guidelines on how a debt deemed unsustainable can be reduced or rescheduled.

The new framework presented on Friday borrows heavily from the rules of the Paris Club, an informal grouping of governments of mostly wealthy countries that has so far been the only common forum for negotiating debt restructuring.

In the new framework, the creditor countries will negotiate with a debtor country, which will have to ask the same conditions of treatment of the creditors of the private sector.

G20 finance ministers said in a joint statement that the framework aims to “facilitate swift and orderly debt processing” for countries eligible for a debt payment freeze put in place in April, but failing to do so. included that private sector creditors on a voluntary basis.

“The fact that we, including non-Paris Club members, agree on such an issue is historic,” Japanese Finance Minister Taro Aso said, adding that private sector creditors should also stick to the new framework.

“Now all interested parties must ensure that the common framework is implemented. Debt transparency is extremely important, ”Aso told reporters after a G20 conference call.

The new framework also goes beyond a debt freeze by requiring the participation of all public creditors, after China was criticized by G20 partners for not including debt to its state-owned banks.

China has emerged as one of the major creditors of developing countries in recent years, often lending through institutions such as the Development Bank of China and China EXIM.

But China is wary of debt cancellations, and Beijing has defined the state-owned Development Bank of China as a private institution, resisting calls for full participation in debt relief.

The Paris Club, organized by the French finance ministry, and the G20 countries already agreed last month to extend this year’s debt freeze under which they deferred $ 5 billion in debt service for help the world’s poorest countries cope with the coronavirus crisis.

G20 leaders are expected to endorse the common framework at a virtual summit next week.

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Greece’s debt is sustainable despite peak linked to pandemic

ATHENS, Greece: The International Monetary Fund said on Monday that Greece’s huge public debt remains sustainable over the medium term despite unprecedented uncertainty in all sectors of the economy due to the pandemic.

After the completion of a new round of follow-up talks with Athens, the IMF said Greece’s economy is expected to contract 9.5% this year before rising 5.7% in 2021. Public debt will reach a record 208% of gross domestic product this year before declining to 199% in 2021 from an already high level of 181% in 2019.

The IMF, in collaboration with European creditors of Greece’s bailout, continues to monitor the economy beyond the end of the acute financial crisis of 2010-2018 and the bailout loan program that has kept the country on hold. afloat after losing access to international markets.

He said the medium-term economic recovery would be supported by a pickup in private consumption, investments linked to privatization and the first rounds of subsidies (from the European Union), and higher merchandise exports.

The IMF added that the increase in public debt vulnerabilities would be mitigated by EU funds and the government’s large liquidity reserve, which would translate into adequate repayment capacity.

He said the pandemic brings unprecedented uncertainty and downside risks to all sectors of the economy, amplified by Greece’s legacy of crisis.

The main risks stem from a protracted pandemic that would derail the expected rebound in tourism and a significant deterioration in bank balance sheets, the IMF said.

Tourism accounts for up to a fifth of the Greek economy, but has been hampered by the pandemic this year.

Monday’s statement also praised the Greek government for its response to the pandemic, which it said has been swift, significant and appropriately targeted at hard-hit households and businesses.

Also on Monday, creditors of the EU bailout for Greece approved the release of an additional 767 million euros ($ 916 million) in Athens debt relief measures.

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Pakistan gets $ 800 million in debt relief

Pakistan has so far secured $ 800 million in debt freeze deals from 14 members of the richest club in the G-20 countries, as it is still awaiting ratification by the remaining six countries, including the Saudi Arabia and Japan, involving billion dollar transactions.

Pakistan along with 76 other poor African countries had qualified for the G-20 debt relief initiative, announced in April this year for the period May-December 2020, to address the adverse effects of the pandemic.

In the past seven months, 14 countries have ratified their agreements with Pakistan, which has provided Islamabad with $ 800 million in fiscal space so far, according to government sources. In addition to these 14 nations, two other countries had also approached to extend debt relief to Pakistan.

Official documents showed that Pakistan has yet to finalize debt rescheduling terms with Japan, Russia, Saudi Arabia, United Arab Emirates and the United Kingdom.

Although these six countries have yet to ratify the debt relief-related agreements, these G-20 members are expected to complete the agreement before the end of next month, a senior official at the Ministry of Economic Affairs said. by answering a question. He said Pakistan was not reimbursing these six countries either, on the understanding that those members would eventually sign the agreements.

Pakistan expected total temporary debt relief of $ 1.8 billion for G-20 members for the period May-December 2020, according to the Ministry of Economic Affairs. This included principal repayments of $ 1.47 billion and $ 323 million in interest on loans.

Estimates from the Ministry of Economic Affairs have shown that Pakistan can get $ 613 million in temporary relief from Saudi Arabia, $ 309 million from China, $ 23 million from Canada, $ 183 million from France, $ 99 million from Germany, $ 6 million from Italy, $ 373 million from Japan, $ 47 million from South Korea, $ 14 million from Russia, $ 1 million from the United Kingdom and US $ 128 million.

So far, Pakistani authorities have concluded 27 debt rescheduling agreements with around 16 countries, according to the Ministry of Economic Affairs.

The maximum relief was expected from Saudi Arabia to the tune of $ 613 million for the May-December period, the sources said. Japan was also to provide relief of $ 373 million. However, the agreements with these nations were still pending final approval. The Russian Federation is also expected to ratify the revised conditions by the end of next month, which, when ratified, could provide temporary relief of $ 14 million.

Pakistan owes the Group of 20 rich nations $ 25.4 billion in August this year. On April 15, the G-20 countries announced a freeze on debt repayments for 76 countries, including Pakistan, from May to December 2020, provided each country makes a formal request.

Saudi Arabia has also failed to extend the $ 3 billion financial aid package and has already prematurely withdrawn $ 1 billion which Pakistan has repaid with another loan to China. Pakistan could also repay the Kingdom $ 1 billion next month, a year ahead of Pakistan’s expectations.

The G-20 countries have also decided to extend the debt relief initiative for another six months (January-June) 2021 due to the second wave of the Covid-19 disease which has started to hit countries again.

The cabinet’s Economic Coordination Committee on Friday approved making another formal request to the G-20 countries for an extension of the debt relief initiative for another six months. This time, the Ministry of Economic Affairs estimated that Pakistan has the potential to get relief of $ 915 million, including $ 273 million in interest payments during the period January-June 2021.

The maximum aid of $ 385 million is expected from China, followed by $ 211 million from Japan, $ 104 million from France, $ 53.6 million from Germany, $ 65 million from the United States. United, $ 12 million from Saudi Arabia, $ 7 million from Russia and half a million dollars from the United Arab Emirates.

In the event that Japan and Saudi Arabia also delay the second phase relief, net benefits could drop to $ 685 million in the second phase, the sources said.

The United Arab Emirates on Thursday suspended the issuance of new visit visas to Pakistan in addition to 11 other countries. There is no reason given by the UAE regarding the decision. Pakistan’s Foreign Ministry confirmed the suspension and said: “We have learned that the UAE has temporarily suspended the issuance of new visit visas until further notice for 12 countries, including Pakistan. The suspension is not applicable to visas already issued.

The UAE has also suspended Pakistan’s work visas and there is a need to prioritize this issue with UAE authorities, Senator Anwer Baig said during a speech on The Express News. – The Review. Senator Baig said Pakistan must find a balance in its relations with the Gulf and other countries. The government should also take steps to help the country get rid of seeking help from friendly countries, he added.

However, the government as a whole is pleased with the current account surplus of $ 1.1 billion during the July-October period of this fiscal year, conveniently ignoring a more than 10% drop in exports during this year. period.

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Pakistan signs $ 1.7 billion debt relief deal

Pakistan has secured a $ 1.7 billion debt relief deal to help offset financial hardship caused by the coronavirus pandemic, officials said on Monday.

The deal, after months of negotiations with creditors, will include a moratorium on debt payments for large parts of the current fiscal year and help ease the cash-strapped country’s massive financial obligations.

“The Pakistani government has successfully negotiated and concluded rescheduling agreements with 19 bilateral creditors, including members of the Paris Club,” the country’s economic ministry said in a statement.

The ministry went on to describe the deal as “timely” which will help save “the lives and livelihoods of millions of people.”

The Pakistani economy was already on life support before authorities began shutting down large segments of the economy in the spring as a series of lockdown measures were put in place to combat the spread of the coronavirus.

Prime Minister Imran Khan has repeatedly called for the cancellation of international donor debt as tax revenues collapsed, inflation soared, the currency was devalued and budget deficits widened.

Earlier this year, the G20 and the Paris Club agreed to waive most of the debt payments of the world’s poorest countries in 2020, as large-scale virus lockdowns turned the global economy around.

In June, Pakistan was named as one of the few countries to secure a moratorium on debt repayment from the Paris Club in a bid to mitigate the economic impact of the coronavirus crisis.

To add to the country’s woes, Pakistan also faces growing questions about the massive amount of debt it has incurred in recent years on infrastructure projects funded by China.

Beijing has regularly poured money into Pakistan, investing more than $ 50 billion through the China-Pakistan Economic Corridor which has improved infrastructure, electricity and transport links across the country.

Islamabad, Pakistan | AFP

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Rwanda secures over $ 16 million in debt relief from IMF

Rwanda is expected to receive debt service relief of $ 16.9 million from the International Monetary Fund (IMF) for an initial period of six months, the Fund said.

This is the second debt service relief granted to Rwanda by the IMF. This is part of the Fund’s efforts to suspend debt collection from a number of countries to help them cope with the impact of the Covid-19 pandemic.

By not servicing its debt for several months, Rwanda will have more capital to invest in affected sectors of the economy and improve its ability to respond to the pandemic.

The $ 16.9 million would have been paid in debt service to the IMF for six months, from October 14, 2020 to April 13, 2021.

Subject to the availability of resources, debt service relief could be granted for a total period of two years, until April 13, 2022, estimated at nearly $ 959 million.

The move aims to free up limited financial resources for essential emergency medical assistance and other relief efforts.

Samba Mbaye, the IMF’s resident representative in Rwanda, told the New Times that the organization was raising funds to further expand debt relief.

“The IMF will continue its fundraising efforts and provide additional debt service relief for a period of up to 24 months depending on the availability of resources,” he said.

Rwanda has also received $ 220.46 million from the International Monetary Fund under the Rapid Credit Facility (FCR) to support recovery amid the Covid-19 pandemic.

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Banks urged to grant debt relief as part of COVID-19 response, temporary ‘disinfection’ jobs offered

Bangko Sentral ng Pilipinas (BSP), the country’s central bank, has advised Philippine banks to offer debt relief to their borrowers to help them cope with the COVID-19 pandemic, the Ministry of Labor and Employment (DOLE) now offering a temporary “disinfection”. “Jobs for workers who have been affected by the virus.

BSP governor Benjamin Diokno, who is currently in self-quarantine, said cable news broadcast ANC today that they will ask banks to extend debt relief to their customers “to help the country’s banking and financial institutions survive the impact of this COVID-19.”

Diokno said the debt relief will be temporary and is expected to last for one year, from President Rodrigo Duterte’s decision declaration of health emergency March 9. The industries that will benefit are those that have been hit hardest by the pandemic, such as bars, restaurants, airlines and shopping malls, among others.

Several establishments in the city, including Metro Manila malls have been forced to close due to the city’s so-called “community quarantine”, the city-wide lockdown that went into effect yesterday.

Diokno said banks are urged to seek debt relief from their customers and the BSP will “consider them favorably”. Banks may also have a moratorium on personal, auto and home loans, and may request relief from the BSP.

The BSP has already asked banks to remove fees for online transactions, as many people work from home, and the suspension of online transaction fees will encourage them to stay indoors.

“We will have to take into account the severe spread of COVID-19. The consensus is that things will get worse before they get better, ”Diokno said.

Read: Actress Bela Padilla Launches Fundraiser to Help Metro Manila Street Vendors Affected by Lockdown

Meanwhile, Department of Labor and Employment (DOLE) secretary Silvestre Bello said workers affected by business closures due to the month-long lockdown can get a temporary work with the agency as cleaners of schools and government buildings.

Bello said in an interview with DZMM radio station today that applicants willing to accept minimum wage can visit any of DOLE’s regional offices. “We are going to give them a job to get paid,” he said.

This afternoon alone, President Rodrigo Duterte would have put the whole island of Luçon on “reinforced community quarantine”, a reinforced measure beyond permanent confinement that could mean nearly 50 million people are confined to their homes, with security forces deployed to ensure compliance.

However, since Presidential spokesman Salvador Panelo first made the announcement via text message to local media, he has since publicly stated that the details need to be worked out and that the president himself will address the matter shortly. .

To subscribe to The Coconuts podcast for new trends and pop culture from Southeast Asia and Hong Kong every Friday!

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China under pressure to cancel debt of poor coronavirus-hit countries under G20 initiative: report

China, the world’s largest creditor, is under increasing pressure to cancel its massive debt to poor countries affected by the coronavirus under the Group of Debt Service Suspension Initiative (DSSI). 20, according to a press article. World Bank President David Malpass on Monday called on China to cancel its debt to poor countries affected by the coronavirus, accusing Beijing’s well-capitalized official lenders of not fully participating in the DSSI.

An additional factor in the current wave of debt is the rapid growth of new official lenders, especially several of China’s well-capitalized creditors, ”said Malpass, at an online event hosted by the Frankfurt School of Finance and Management. portfolios dramatically and do not participate fully in the debt rescheduling processes that have been developed to mitigate previous waves of debt, ”the Hong Kong-based South China Morning Post said.

G20 finance ministers agreed to a “time-limited suspension of debt service payments” to the world’s 77 poorest countries at the online spring meetings of the International Monetary Fund (IMF) and the World Bank on April 15 given the grim situation these countries are facing due to the coronavirus pandemic. As part of this DSSI, a payment estimated at US $ 12 billion to be made between May 1 and the end of 2020 has been rescheduled.

According to an article published by the Chinese state-owned company CGTN, more than 100 low- and middle-income countries will still have to pay a total of 130 billion USD in debt service in 2020. In addition, 43 countries have received about five billion USD from the DSSI to finance social, health and economic measures to respond to the pandemic.

China is the largest bilateral lender to most emerging economies, especially lending to hundreds of projects under its Belt and Road Initiative (BRI). Of the amount owed by poor countries participating in the G20 debt plan between May and December this year, 70%, or $ 7.17 billion, was for China. That amount is expected to reach $ 10.51 billion, or 74 percent of the total, next year if the DSSI is extended, the Post report said on Wednesday.

China has been criticized in particular by G7 countries for classifying large public and government-controlled financial institutions as commercial lenders and not as official bilateral creditors. Those critics include Malpass, who said the Development Bank of China (CDB) must participate as the official bilateral lender for the DSSI to be effective, according to the report.

China argued that since the CBD lends on commercial rather than concessional terms, the bank should be treated as a commercial lender. CBD loans to DSSI-eligible countries are highly concentrated in Angola and Pakistan. China said since the adoption of the G20 debt freeze deal in April, it had received more than 20 applications and reached agreements with more than 10 borrowers by the end of July, without specifying the recipients.

For its part, China has been pushing for the World Bank to be included in the DSSI, a move that has so far been pushed back by other World Bank / IMF members. In June of this year, Beijing hosted an online China-Africa COVID-19 Solidarity Summit where the debt situation was discussed, as 40 of the 77 developing countries are located in sub-Saharan Africa.

China’s debt to African countries is estimated to be $ 150 billion in 2018. Reports indicate that China holds about a third of Africa’s sovereign debt as China has extended its funding. to a number of African countries amid concerns over a debt trap and even loss of sovereignty, especially after Sri Lanka ceded its port of Hambantota to a Chinese state-owned company in 2017 for a 99-year lease in the form of a debt swap in the amount of $ 1.2 billion. The Post quoted Mark Bohlund, senior analyst at REDD Intelligence, as saying that there had been no movement on the DSSI extension and inclusion of CBD largely because China did not want to be intimidated on the scene. global.

Bohlund said China does not want to be forced to foot much of the bill for extending the DSSI without any concessions from G7 countries in other areas. In May this year, the New York Times reported that China was inundated with requests for debt relief from several countries, including Pakistan, Kyrgyzstan, Sri Lanka and a number of African countries, asking to restructure, delay repayments or cancel tens of billions of dollars in loans. coming this year.

China faces tough choices. If he restructures or cancels these loans, it could strain their financial system and infuriate the Chinese people, who are suffering from their own downturn. But if China demands a refund when many countries are already angry with Beijing for its handling of the pandemic, its quest for global influence could be threatened, ”he said.

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credit insurance vs vacation debt relief

Personal finance expert Maya Fischer-French on the pros and cons of turning to credit insurance versus opting for debt relief leave.

Also read:

Covid-19 and nationwide lockdown to slow its spread are wiping out the economy.

South African consumers – already heavily indebted before the epidemic – will face serious difficulties in the months and years to come.

Many will lose their jobs and their ability to repay their loans.

There are two options you may want to consider at this time:

© fuséeclips /

You might not realize it, but – if you’ve taken out credit – chances are you have credit insurance linked to the loan.

Credit insurance (also known as a “credit life insurance policy”) is a policy that pays off your debt if you die or become disabled or, sometimes, if you are made redundant.

Every credit insurance policy is different; check your terms and conditions.

Most credit providers in South Africa have now launched various Covid-19 ‘debt relief holidays’ whereby repayment terms are extended and / or repayments are suspended for a period.

Bruce Whitfield of The Money Show Asked personal finance journalist Maya Fischer-French on the pros and cons of tapping into credit insurance versus opting for debt relief leave.

Whitfield also spoke to FNB Life CEO Lee Bromfield.

If you take the payment holiday… it adds the principal that you have to repay. It’s not a freebie… Credit life insurance… it’s been abused before… people don’t even know they have it… Check if you have credit insurance… you probably have it!

Maya Fischer-French, personal finance journalist

Only the African Bank sent a press release saying that credit life insurance is available…

Maya Fischer-French, personal finance journalist

Credit life has been around for some time. It’s built into our processes… we try to contact all of our customers… how they can make a complaint… We prefer that our customers don’t go into more debt…

Lee Bromfield, CEO – Life FNB

For more details, listen to the interviews in the audio below.

More from MyMoney Online

More personal finance with Warren Ingram

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The Need for Debt-Climate Swaps by Shamshad Akhtar, et al

With developing countries facing a debt crisis that will only worsen as the COVID-19 pandemic continues, it is already inevitable that massive debt relief will be needed. The only question is whether it will be designed to deal with the even bigger climate crisis that is approaching.

ISLAMABAD – A global debt crisis is looming. Even before COVID-19 hit the world, the International Monetary Fund had Posted a warning on the public debt burden of developing countries, noting that half of all low-income countries were “at high risk or already in debt”. As the economic crisis deepens, these countries are experiencing sharp contractions in production at the same time as COVID-19 relief and recovery efforts demand a massive increase in spending.

According to the United Nations Conference on Trade and Development, the repayment of the external public debt of developing countries will cost $ 2.6 to $ 3.4 trillion in 2020 and 2021 alone.Therefore, market analysts now to suggest that nearly 40% of the sovereign external debt of emerging and frontier markets could be in default next year.

Worse, measures to deal with this debt crisis will clash head-on with global efforts to tackle climate change, inequality and other worsening global crises. So we need some creative thinking on how to advance multiple goals at the same time. We must both achieve a solid recovery from the pandemic-induced crisis and mobilize trillions of dollars for the transition to a more financially stable, socially inclusive and low carbon economy.

In April, G20 finance ministers approved a debt service suspension initiative to temporarily suspend the debt service of the world’s poorest countries as they deal with the COVID-19 crisis. Unfortunately, few debtor countries accepted this offer, fearing what it could give to markets and rating agencies. Moreover, private sector lenders have largely refused to offer significant forbearance on their part, thus undermining government efforts.

In the absence of new forms of liquidity support and major debt relief, the global economy cannot return to pre-pandemic growth levels without risking serious climate unrest and social unrest.Climatologists tell us that to meet the targets set in the Paris climate agreement, net global carbon dioxide emissions must fall by around 45% by 2030 and 100% by 2050. Given that the effects of the As climate change is already being felt around the world, countries urgently need to increase their investments in climate change adaptation and mitigation.

But that won’t be possible if governments get bogged down in a debt crisis. On the contrary, debt servicing demands will push countries to seek export income at all costs, including by reducing climate-resilient infrastructure and increasing their own use of fossil fuels and resource extraction. This course of events would further depress commodity prices, creating a catastrophic loop for producing countries.

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Faced with these concerns, the G20 has called on the IMF “to explore additional tools that could meet the needs of its members as the crisis evolves, building on relevant experiences from previous crises”. One of these tools that should be considered is a “climate debt swap” facility. In the 1980s and 1990s, developing countries and their creditors engaged in “debt-for-nature swapsWhere debt relief was linked to investments in reforestation, biodiversity and the protection of indigenous peoples.

This concept should now be broadened to include people-centered investments that tackle both climate change and inequality. Developing countries will need additional resources if they are to have any chance of leaving fossil fuels in the ground, investing enough in climate adaptation and creating job opportunities in the 21st century. One source of these resources is debt relief conditional on such investments.

Such a policy tool would not only put us on the path to recovery, but could also help prevent future debt sustainability issues that could arise as more stocks of fossil fuels and unresilient infrastructure become. “blocked assets. “In addition, the dramatic drop in the cost of renewable energy represents an opportunity for a surge in investment in zero-carbon energy infrastructure, which in itself would help alleviate energy poverty and unsustainable growth.

Some economists estimate that putting the global economy on the path necessary to limit global warming to 1.5 ° C would generate around 150 million jobs worldwide. At the same time, the United Nations Environment Program Production variance report showed that current production plans would push air emissions far beyond the limit of what is sustainable. To meet the goals of the Paris climate agreement, more than 80% of all proven reserves of fossil fuels will therefore need to remain in the ground.

Given the realities of the climate crisis, it would be foolish to include high-risk investments in fossil fuel extraction and infrastructure as part of any recovery strategy. Fortunately, with climate debt swaps, we could actively drive the transition to a low-carbon economy while stabilizing commodity prices and providing fiscal space for developing countries to invest in resilience and sustainability. sustainable development.

There is no doubt that many countries will need debt relief to respond effectively to the COVID-19 crisis and then to protect their climate economies in a socially inclusive manner. For many people in countries most vulnerable to climate change, finding the resources to make such investments is a matter of survival.

The G20 called on the IMF to develop new tools and strategies to present to its summits this fall. An ambitious global deal to swap debt for climate action and social equity should be high on the agenda.

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Somalia to benefit from debt relief under the enhanced HIPC Initiative

Somalia to benefit from debt relief under the enhanced HIPC Initiative

March 25, 2020

Washington DC
The International Monetary Fund (IMF) and the International Development Association of the World Bank have determined that Somalia has taken the necessary steps to begin receiving debt relief under the Enhanced Initiative for heavily indebted poor countries (HIPCs). Somalia is the 37e
countries to reach this stage, known as the HIPC decision point.

Debt relief will help Somalia bring lasting change for its people by allowing its debt to be irrevocably reduced from US $ 5.2 billion at the end of 2018 to US $ 557 million in value terms current net present (NPV) once it reaches the HIPC completion point in about three years. ‘ time. As Somalia continues on the path to stability and development after 30 years outside the international financial system, the immediate normalization of its relations with the international community will reopen access to additional financial resources essential to strengthen the economy, help improve social conditions, lift millions of people out of poverty and generate sustainable jobs for Somalis.

“I would like to congratulate the Somali government and people for their intense efforts over the past few years leading up to this momentous event,” said Kristalina Georgieva, Managing Director of the IMF. “The successful reform efforts have laid the foundation for inclusive economic growth and meeting the needs of the country’s most vulnerable people. Work must continue to support and expand the implementation of these reforms as Somalia enters a new chapter in its history. I am convinced that a more resilient and prosperous future awaits the Somali people. ”

“We welcome Somalia’s efforts to restore stability, build relationships with creditors and adopt a poverty reduction strategy,” said World Bank Group President David Malpass. “The resumption of regular funding for Somalia is an important milestone, and we look forward to further economic and social progress. ”

“The Somali government and people are very satisfied with the decision of the IMF and the World Bank Group which allows Somalia to fully re-engage with international financial institutions. This decision is an important step that presents many opportunities for Somalia as it relentlessly pursues its ongoing reform processes as well as its recovery and development agenda, ”said

Hassan Ali Khayre, Prime Minister, Federal Government of Somalia

. “The journey that led to this decision required hard work, dedication and partnership. The FGS expresses its gratitude to the IMF, the World Bank Group and their partners for their unwavering support and to the Somali people for their patience and resilience on this journey.

Somalia is committed to maintaining macroeconomic stability; implement a poverty reduction strategy; and put in place a set of reforms focused on fiscal stability, improving governance and debt management, strengthening social conditions and supporting inclusive growth in order to reach the HIPC completion point . The World Bank and the IMF will continue to work together to provide the technical assistance and policy guidance the authorities need to achieve these goals, including in the context of the IMF’s new three-year financial arrangement.

In addition, the World Bank is considering a

range of new IDA investments

with a focus on immediate relief for communities affected by flooding, the locust invasion as well as preparing for the rapid threat of COVID-19. The leaders of the World Bank Group and the International Monetary Fund expressed their thanks to their member countries from all regions and all income levels, especially Italy, Norway, Qatar and the United Kingdom, as well as the EU, whose interventions catalyzed the support and provided the financial resources needed to help Somalia reach the decision point.

Details of the debt relief transaction

· At the start of the HIPC process, Somalia’s public and state guaranteed external debt was estimated at US $ 5.2 billion in NPV terms. Applying traditional debt relief mechanisms reduces this debt to US $ 3.7 billion.

· Additional debt relief under the enhanced HIPC Initiative is estimated at US $ 2.1 billion in NPV terms. Of this amount, US $ 843 million and US $ 1,225 million are expected to be provided by official multilateral and bilateral creditors, respectively.

· Paris Club creditors are expected to make a decision on debt relief by the end of March 2020. The main Paris Club creditors are the United States, Russia, Italy and France. The IMF Executive Board approved interim debt relief on the debt service owed to the IMF during the period between the HIPC decision and completion points. At the HIPC Initiative completion point, Somalia’s current debt to the IMF will be paid with the proceeds of financial contributions received from over 100 IMF members, including many low-income countries.

· Debt relief under the MDRI of IDA and the African Development Bank would write off all outstanding debts at the completion point.

Together, Somalia’s external debt burden is expected to rise from around $ 5.2 billion (110.7% of GDP) in NPV at the end of 2018 to $ 557 million (9% of GDP) once the point of completion achieved.

IMF and World Bank Arrears Clearance Operations

Arrears owed

IDA have been authorized

on March 5, 2020 through bridging funding provided by the Norwegian government, repaid with the proceeds of a development policy grant.

· Arrears to the IMF were cleared on March 25 with the help of Italian government bridging finance, which the authorities repaid using priority access under the IMF’s new financial arrangement.

Arrears to the

African development bank

were cleared on March 5, 2020 with bridging funding provided by the UK government and a contribution from the EU. The UK bridging loan was repaid with the proceeds of a policy-based operating grant.

The HIPC Initiative

In 1996, the world Bank
and IMF
launched the HIPC Initiative to create a framework within which all creditors, including multilateral creditors, can provide debt relief to the world’s poorest and most indebted countries to ensure debt sustainability , and thus reduce the constraints on economic growth and poverty reduction imposed by the unsustainable debt service charges in these countries. To date, 37 HIPC countries, including Somalia, have reached their decision points, of which 36 have reached the completion point.


Created in 2005, the objective of

Multilateral Debt Relief Initiative

(MDRI) is to further reduce the debt of eligible low-income countries and provide additional resources to help them achieve their development goals. Under the MDRI, three multilateral institutions – the World Bank’s IDA, the IMF and the African Development Fund – provide 100% relief on eligible debts to eligible countries when they reach maturity. HIPC Initiative completion point.

Related links: Initiative-hipc-poor-indebted-countries

The Boards of Directors of IDA and IMF met on March 24, 2020; the decisions of the IMF Executive Board came into effect on March 25, 2020.

IMF Communications Department


Telephone: +1 202 623-7100E-mail: [email protected]

@ IMFSpeaker

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The new law will not help alleviate the debt

South Africans’ extremely high debt distress rate is well documented. The gravity of the situation is reflected in the headline of an article in The Economist last year: “In South Africa, More People Have Loans Than Jobs”.

Given that over 40% of active consumers in the country are in arrears of credit and that we have a total debt load of 1.7 trillion rand, our economy and our society are at risk. Obviously, intervention to relieve this crisis is needed. This is recognized by the government, which has commissioned extensive research on the issue. In addition, Parliament recently passed legislation to provide intervention: the National Credit Amendment Act. The president signed the law in August.

While recognizing that the dire situation facing South African consumers is important in the way of alleviating this crisis in our country, this legislation, in its current form, is not what is needed. In fact, many of the industry’s comments aren’t either. For example, it has been suggested that the debt relief proposals could put the banking sector at great risk, as R13-20 billion in debt could be canceled through the provisions of the law. This creates an environment of alarmism and panic which, in our opinion, is not valid.

Industry players making comments like this are reckless, especially as a closer look at the legislation makes it clear that a significant amount of debt is unlikely to actually be written off.

First, the law only provides debt relief for certain debtors: those with household income less than R7,500 per month, who have unsecured debt of less than R50,000, and whose income in relation to the amount owed reflects a situation of over-indebtedness. Since all of these factors must apply for a request for debt intervention to be considered, only a small portion of debtors will be eligible for debt intervention.

The onus is then on the debtor to seek intervention on the debt, assuming he has the knowledge, understanding and resources to do so.

There are enormous communication needs regarding the explanation of the concept, process, rights and obligations to the most vulnerable people in our society, and we have great concerns as to how this could be achieved.

Second, we question the practicality of several of the provisions of the act. It is not clear, for example, how the authorities will be able to carry out an over-indebtedness assessment, as required, for each individual debtor requesting relief. The sheer volumes make it highly unlikely that most people seeking help will be treated.

Another problem that makes the provisions of the law inapplicable is that only one body will have the power to deal with these requests: the National Credit Regulator (NCR).

It is not an organization with a large national footprint – in fact, it only has one office, located in Midrand near Johannesburg. So how could a minor from the Northwest, a rural single mother from the Eastern Cape surviving on welfare, or a farm worker from the Karoo access the services of the NCR?

The most vulnerable debtors in our society are the least likely to have access to tools such as computers and smartphones with Wi-Fi availability, so the RCN would likely need thousands of field workers with physical presence throughout the country. How this will be implemented in practice is unclear.

The law also provides for a complicated two-year financial review process before a debt can be written off. Again, the practical implications suggest that few consumers will reach the end of this process and have their debts written off, even among the small portion of consumers who manage to qualify and successfully apply for debt intervention first. place.

It is estimated that 407 million Rand of taxpayer money would be needed to make the provisions of the law enforceable. This would include funds to communicate important process messages, to pay infantry who should be employed, and to finalize debt write-offs through the National Consumer Court, among other costs.

Considering that it is unlikely that more than R100 million will be written off, the cost / benefit ratio for the year becomes questionable.

It may be much easier to simply write off the debt of those who clearly have no chance of repaying – those who earn less than R7,500 per month, for example.

This way, no industry will find itself at risk and we will not use large sums of taxpayer revenues to fund a process that appears to have many obstacles to success.

Mareesa Kreuser is Legal Counsel and Head of Audit at Summit Financial Partners.


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Client Alert: Changes to the Fair Debt Collection Practices Act and the Fair Credit Likely Reports Act with the proposed new bill

On April 7, 2020, a new bill was introduced by Congresswoman Katie Porter (D-CA), a member of the House Financial Services Committee and a former law professor and consumer advocate in the House of Representatives. The bill, if passed, would amend the Fair Debt Collection Practices Act and the Fair Credit Reporting Act, specifically regulating how medical debts are handled under those laws.

The bill has 68 co-sponsors in the House of Representatives (67 Democrats and 1 Republican). The current title of the bill is: “Amend the Fair Credit Reporting Act to institute a one-year waiting period before medical debt is reported on a consumer’s credit report and to remove medical debts paid and settled credit reports that have been fully paid or settled, to amend the Fair Debt Collection Practices Act to provide a timeline for medical debt verification and to increase the efficiency of credit markets. credit with more perfect information, and for other purposes.1

The details of the bill and the text have not yet been released. However, the name provides abundant context as to what lawmakers hope to accomplish. The bill has been referred to the House Committee on Financial Services for consideration, according to

According to Congressman Porter press release, the bill has garnered support from the National Association of Consumer Advocates, the Consumer Federation of America, the Americans for Financial Reform and the National Patient Advocate Foundation.3 MP Porter went on to say, “No one chooses to get sick and take on medical debt. It is not good that families are struggling with years and years of additional financial hardship because of an illness or injury they could not foresee.

Senator Jeff Merkley (OR) reintroduced a companion bill in the Senate, joining Porter. The associated bill, entitled “Medical Debt Relief Act”, is co-sponsored by Senators Richard Blumenthal (D-CT), Elizabeth Warren (D-MA), Bob Menendez (D-NJ) and Dick Durbin (D-IL) . “Imagine recovering from an intense medical event and paying all of your medical bills, only to be haunted by this debt for years to come,” Senator Merkley said in her press release.4 “Tens of millions of Americans have lived through this reality – a nightmare that will only get worse as we battle the coronavirus pandemic. No patient or family should lose their credit opportunities because they got sick, so especially now, Congress should pass the Medical Debt Relief Act. “5 The full text of the Medical Debt Relief Act can be found here.

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Poorest countries face tough choice over G20 debt relief plan

LONDON (Reuters) – The world’s poorest countries may soon be faced with a tough decision – to double G20 debt relief with warning they must default on private creditors, or quit the program to try to keep the financial markets on the side.

FILE PHOTO: A man stands next to a chalkboard with the logo of the G20 Finance Ministers Meeting in Buenos Aires, Argentina, March 19, 2018. REUTERS / Marcos Brindicci / File Photo

Rich countries on Friday supported an extension of the G20 Debt Service Suspension Initiative (DSSI), approved in April to help developing countries survive the coronavirus pandemic and which has seen 43 of 73 countries potential eligible here defer $ 5 billion in “public sector” debt repayment.

The European Network on Debt and Development (Eurodad), made up of 50 non-governmental organizations, estimates that extending the temporary six-month freeze would provide additional relief of $ 6.4 billion, rising to $ 11.4 billion. dollars if the extension runs until the end of 2021.

That would represent just over a quarter of next year’s combined debt payments for countries already enrolled in DSSI, and would represent up to 4.3% of GDP for countries like Angola, according to Fitch Ratings.

But an important chain can be attached.

Amid warnings that the pandemic could push 100 million people into extreme poverty, World Bank President David Malpass is also calling on banks and investment funds that have loaned DSSI countries to get involved. .

“So far, the relief is too shallow to light the end of the debt tunnel,” Malpass told the United Nations on Tuesday. “Commercial creditors are not participating in the moratorium, draining funding provided by multilateral institutions. “

Kevin Daly of Aberdeen Standard Investments, who is part of a joint private sector response to DSSI’s proposals, believes that opinions such as Malpass’s Average Private Sector Involvement (PSI) – write downs for equity holders bonds – could become “mandatory” as part of the expected extension.

Such a change could be signaled at IMF meetings next month.

Eurodad calculates that DSSI countries must pay private sector bondholders $ 6.4 billion and other private lenders $ 7.1 billion next year, a combined $ 13.5 billion that is more than what the signatory countries owe the governments of the G20.

“We have already heard that there is a strong possibility that this (PSI) could be the case,” Angolan Secretary of State for Budget and Investment Aia-Eza Silva said, adding that the he main focus of Angola remains bilateral creditors like China.

(Graphic: How much debt relief will DSSI bring to countries -)


Charity groups estimate that 121 low- and middle-income governments spent more last year on external debt servicing than on public health systems which are now at the breaking point, which is a strong moral argument for relief.

However, there are other complicating factors.

Rating agencies S&P Global, Moody’s and Fitch have warned that if countries suspend or postpone debt payments to the private sector, it would almost certainly be classified as restructuring and default by their criteria.

Restructuring is complex and generally takes much longer than the affected countries currently do. It would also mean that the poorest countries that have struggled to access international markets over the past decade would lose it just as they face enormous challenges.

Moody’s estimates that they face a combined funding gap of $ 40 billion this year. The Institute of International Finance estimates that the external debt of the countries of the DSSI has more than doubled since 2010 to reach more than 750 billion dollars and now represents on average nearly 50% of the GDP, a high level for their stage of development. .

A total of 23 DSSI-eligible countries have sold Eurobonds, but only a few, such as Honduras and Mongolia, have done so since the program launched in April. Pakistan wants to sell $ 1.5 billion worth of bonds, but creditors would back off if PSI were to emerge.

“It is extremely unlikely that a country that is part of it (DSSI) this year will jeopardize its market access,” said Kevin Daly of Aberdeen. “I don’t think any of them would want to participate.”

(Chart: DSSI debt country bonds -)

Poverty action groups say the private sector is exaggerating the issue, highlighting the speed at which Argentina sold a 100-year bond after one of its restructurings.

A potential ‘carrot’ for countries and their creditors could be Brady bond-type debt swaps, where investors write off certain loans in exchange for new, credit-enhanced bonds with full or partial guarantees from the G20 or multilateral development banks. .

JP Morgan’s bond index arm stirred up discussions about such a plan when it announced this month that enhanced credit debt would be eligible for its emerging markets benchmark from mid-October, just after the main IMF and G20 DSSI meetings.

Eurodad’s Iolanda Fresnillo said debt swaps could be a solution for many countries, although the hardest hit countries would need more extreme measures.

“It’s not just a liquidity crisis, we need to tackle debt sustainability and opt for debt cancellation,” Fresnillo said.

“By simply postponing payments, you are not solving the problems these countries are facing.”

Additional reporting by Andrea Shalal in Washington and Karin Strohecker in London; Editing by Catherine Evans

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Democratic Republic of Congo Says China Has Granted Pandemic Debt Relief

Democratic Republic of Congo Says China Has Granted Pandemic Debt Relief

KINSHASA (Reuters) – China has granted some debt relief to the Democratic Republic of the Congo to help it weather the economic fallout from the coronavirus pandemic, the Congolese foreign ministry said on Wednesday.

As a result, the Congo will not have to repay its interest-free loans from China which matured at the end of 2020. The ministry did not specify how much this amounted to.

China has provided more than $ 2 billion in debt relief to developing countries as part of the G20 aimed at giving those hit by the COVID-19 crisis a financial respite.

The latest deal was announced at a joint press conference in Kinshasa with Chinese Foreign Minister Wang Yi.

“As the Congo’s most trusted friend, China wishes to continue to make its contribution to the development of the Congo,” Wang said in the Congolese ministry’s statement.

According to data collected by the Johns Hopkins China Africa Research Initiative, Chinese entities granted 53 loans to the Democratic Republic of the Congo between 2000 and 2018, for a total amount of $ 2.4 billion. Most of the loans have been concentrated in the electricity, transport and mining sectors.

The major producer of cobalt and copper has attracted billions of dollars in investment from Chinese miners in recent years.

Congo’s exports to China jumped 30% in 2020 from the previous year.

(Reporting by Stanis Bujakera, additional reporting by Karin Strohecker in London; Writing by Alessandra Prentice; Editing by Bate Felix and Bernadette Baum)

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World Bank Seeks Ways To Reduce Debt In Poor Countries Instead Of Delaying Payments

File photo of David Malpass, President of the World Bank. | Photographer: Andrew Harrer | Bloomberg

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Washington: The World Bank is looking for ways to reduce the amount of debt of poor countries – rather than simply delaying payments – to attract more investors in the wake of the global pandemic and recession, President David Malpass said.
The coming months and the annual meetings of the World Bank and the International Monetary Fund in October present a good time horizon for action, Malpass said Wednesday in an interview on Bloomberg Television with Tom Keene. Malpass said he also sees an opportunity to expand relief under the Debt Service Suspension Initiative which began in May through 2021, an option he says will be supported. of the Group of Seven and the Group of 20 major economies.

“The next step is more difficult – a deal to actually do haircuts or cutbacks,” said Malpass. “But this has happened in the past; for example, in the 1980s, during the latin debt crisis, it happened to haircuts, but it took so long that countries were in very, very serious difficulties by the time it was ‘is produced. So one of the things we are trying to do is speed this up so that you can get a good result sooner. “

At a meeting in July, the G-20 said it would decide to extend the current suspension of debt payments closer to year-end, postponing assurances of further relief as the pandemic virus continues to burn around the world. Even with the April G-20 agreement to forgo bilateral debt payments from vulnerable countries, the cost of servicing bonds crowds out health and social spending.

China owes nearly 60% of the money the world’s poorest nations are expected to repay this year, according to World Bank data, and the nation has made numerous loans to developing countries on terms that are not transparent and at higher interest rates. than nations can afford, said Malpass. This underscores the importance of China’s participation in debt relief, he said.

Many Chinese credit agencies, including the Export-Import Bank of China, “participate in DSSI with the restructuring terms that other countries are using,” Malpass said. “Some of them aren’t, which creates the challenge we’re working on – by disclosing it.”

The Ex-Im Bank of China and the Development Bank of China finance a fifth of major infrastructure projects in Africa, according to consultancy firm Deloitte. In a separate interview later Wednesday, Malpass said that based on the characteristics of its outstanding debt, the BDC should participate in the global debt relief initiative as an official bilateral creditor rather than a private creditor, as she sought to do so.

Official creditors have committed through the G-20 agreement to participate in the debt suspension initiative; the private sector is only strongly encouraged to do so.

Read also : Covid cost tourism up to 5.5 cr jobs, Rs 1.58 cr lakh income – government tells House panel

Advantageous creditors

In many developing countries, loans are balanced in favor of creditors rather than debtors in terms of legal structure, creating moral hazard that increasingly encourages lending as creditors have an advantage in restructuring scenarios, said Malpass.

“This makes it difficult to come up with debt resolutions that allow light at the end of the tunnel for developing countries,” he said.

Malpass has repeatedly called on the private sector to become more involved in debt relief alongside official creditors and said language regarding the need for comparable treatment could be strengthened. He cautioned that official bilateral aid should not be conditioned on the level of private sector involvement.

Malpass said the World Bank and IMF are working on assessing the debt sustainability of developing countries and will discuss it at annual meetings in October. He said the World Bank wants to prevent a significant portion of its aid from being used by countries at risk of debt problems to repay past loans.

“We want good results for developing countries and especially for the poorest,” he said. – Bloomberg

Read also : Saudis set to join landmark Israel-UAE peace deal, Trump says

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North Carolina Restaurant & Lodging Association Statement on Federal Pandemic Bill | Company

GREENSBORO, HIGH POINT, WINSTON-SALEM, NC – Today Congress unveiled a $ 900 billion relief bill to provide short-term economic relief to the country from the coronavirus pandemic. The plan includes several elements that will benefit restaurants, bars and hotels, including a second access to the Paycheck Protection Program (PPP), with unique provisions to help the hospitality industry, which continues to suffer losses. unprecedented jobs and income.

“This bill will help the North Carolina hospitality industry with much-needed capital that will give us more time to work with Congress to design additional programs to save our beloved community restaurants, bars and hotels,” said said Lynn Minges, President and CEO of NCRLA: “Since the early days of the pandemic, when restaurants and bars in North Carolina were closed and travel was restricted, the North Carolina Restaurant & Lodging Association worked with the National Restaurant Association, the American Hotel & Lodging Association and other partners to lobby Congress. and the Trump administration for long and short term economic support.

The plan announced today targets relief for restaurants, bars and hotels with provisions including:

Enhanced PPP Loan Amount: The PPP offers a company a forgivable loan based on 2.5 times its monthly salary costs. Restaurants and hotels, however, can apply for repayable loans based on 3.5 times monthly salary costs.

Improved access to PPP: Companies that employ a total of 300 or more employees across all sites (combined) are deemed ineligible for PPP. Today’s bipartite plan reflects the reality that many mid-to-large size foodservice, hospitality and hospitality groups are on the verge of bankruptcy and allows them to qualify for the PPP as long as they employ no more than 300 employees at each physical site.

One year extension for the relief of the restructuring of troubled debts (TDR) (article 4013 of the CARES law). This will allow banks to continue working with borrowers to achieve additional forbearance and debt relief until the end of 2021.

Other provisions of the bill that will benefit restaurants, bars and hotels include deductibility of business expenses paid with PPP loans, improved Employee Retention Tax Credit (ERTC), extension of work opportunities tax credit (WOTC) and tax increases. deduction for business meals.

“The past nine months have been the toughest in hospitality industry history,” Minges said. “We are proud of the many partners and friends who have come together across our state to push for this stimulus package. We recognize that today’s bipartisan stimulus package has been an uphill battle in Congress, and we thank the members of our NC Congress delegation for their unwavering support to our industry. We see this as a “down payment” on the relief we will ultimately need to make North Carolina’s restaurants and hotels whole, and we look forward to working together in the New Year to meet those needs.


About the NCRLA

Founded in 1947, the North Carolina Restaurant and Lodging Association serves to promote and protect the interests of more than 20,000 businesses that employ 11% of the state’s workforce and generate more than $ 27.3 billion. sales per year. The association provides access to the resources and support restaurant and accommodation professionals need to run successful businesses, while being conscientious and contributing members of an unprecedented industry. To learn more about the NCRLA or its membership opportunities and economic benefits, please visit

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Has the architecture of international debt failed the COVID-19 pandemic test?

By Yuefen Li, United Nations Independent Expert on Debt and Human Rights

For the first time in history, the world economy is facing a severe synchronized economic recession, affecting both developed and developing economies on all continents. COVID-19 and the resulting lockdowns and social distancing measures to contain the spread of the virus have led to a sharp economic downturn, accompanied by unanticipated economic and social costs due to the widespread collapse of nearly all income generation channels for many governments, including falling commodity prices, drastic cuts in foreign direct investment and trade, sudden stops in tourism, free drops in remittances and collapsing tax systems. The World Bank has estimated that COVID-19 will push 71 million people into extreme poverty by 2020, measured at the international poverty line of $ 1.90 per day.1Daniel Gerszon Mahler, “Updated Estimates of the Impact of COVID-19 on Global Poverty,” World Bank Blogs, June 8, 2020.

The current cumulative crises exacerbated by the COVID-19 pandemic have put the debt problems of developing countries in the spotlight. Many developing countries have entered the pandemic with unprecedented levels of public and private debt.2UNCTAD, “The shock of Covid-19 in developing countries”, March 2020. More than 40% of low-income countries were already over-indebted or at high risk of debt distress before the pandemic.3IMF, “The Changing Public Debt Vulnerabilities in Low-Income Economies,” February 2020. The economic contraction, the need for a pandemic response and the unsustainability of debt have fed each other, creating a dark vicious cycle that spirals down to the bottomless hole. The tight fiscal space for the pandemic response exacerbated the economic and social impacts of the pandemic, which in turn resulted in an increased need for borrowing, increased debt, and a debt service burden.

The changing debt landscape of developing countries has increased the debt service burden. Many developing countries, including some without an investment grade rating, have turned to riskier debt, including debt on commercial or near-commercial terms, thereby increasing their interest-to-revenue ratios on their external debt.4World Bank, “Debt Service Suspension and COVID-19,” Backgrounder, May 11, 2020. Among low-income countries, more than half of public debt is on non-concessional terms.5M. Ayhan Kose et al., “Caught by a cresting debt wave: past debt crises can teach developing economies to cope with COVID-19 financing shocks”, Finance and Development, Vol. 57, n ° 2, June 2020. Recent analysis indicates that in 2019, 64 low-income governments spent more on paying external debt than on health care.6Jubilee Debt Campaign, “Sixty-four countries spend more on debt payments than on health,” April 12, 2020. With their weaker health and social protection systems, a heavy debt burden, and deteriorating economic buffers, developing countries, especially those that are poor and over-indebted, have little room to provide support. response to the pandemic and need massive liquidity and funding. support to deal with the immediate fallout from the pandemic and its repercussions on economic and human rights. Unlike developed countries, they cannot put in place huge fiscal and monetary stimulus packages.

According to the International Monetary Fund (IMF), global government support stood at around $ 9 trillion in May 2020,7Bryn Battersby, W. Raphael Lam and Elif Ture, “Tracking the $ 9 trillion global fiscal support to fight COVID-19,” IMF Blog, May 20, 2020. most of them from advanced countries, which have a wide range of instruments. It is concerning that while advanced economies have used 8.6% of their gross domestic product (GDP) to respond to the pandemic, emerging and low-income economies have used 2.8% and 1.4% respectively of their GDP for expenses and taxes related to the pandemic. reductions.8Martin Mühleisen, Vladimir Klyuev and Sarah Sanya, “Courage Under Fire: Policy Responses from Emerging Markets and Developing Economies to the COVID-19 Pandemic,” IMF Blog, June 3, 2020. Some developing governments face difficult choices between saving lives or paying off debts.

Whether effective and timely measures can be deployed to alleviate the debt problems of developing countries and enable them to put in place appropriate responses to the pandemic is an important test for the international debt architecture. It is interesting to note that while the composition of the debt and the actors have changed considerably in recent years, the tools for preventing and resolving debt crises have remained more or less the same since the 1980s, with the exception of a certain tightening of bond contracts. This mismatch has made the policy proposals created in response to the COVID-19 crisis appear, to some extent, to lack both power and sophistication.

Three counterfactual scenarios could have helped developing countries avoid sovereign and private defaults and focus limited financial resources on combating the pandemic: the first is to have a comprehensive debt moratorium for as long as the pandemic lasts; the second is to provide massive amounts of liquidity to countries facing debt problems and hard hit by the pandemic in an “all it takes” way; and the third is to quickly benefit from large and meaningful debt relief, including debt restructuring and cancellation, which would be particularly useful for countries already facing solvency problems, as their debt is unsustainable and their financial capacity insufficient to pay this debt, even if transition money is provided.

But the architecture of international debt has gaps, constraints and constraints. So, we had too little of all three: a limited debt status quo, insufficient liquidity provision, and little debt relief. The criticism is that the answer is far from sufficient. As a result, we could face a lot of debt restructurings in the years to come.

For the debt status quo: The International Monetary Fund (IMF) and the Group of 20 (G20) have announced the freezing of the debt of poor countries in April 2020. They are welcome. However, the coverage in duration, country and debt instruments of the G20 is far too restrictive. One problem that seems to escape the G20’s radar is that some low-income debtors have access to international capital markets and fear possible rating downgrades. Therefore, a number of eligible countries have not requested the Debt Service Suspension Initiative (DSSI). The landscape has changed, but policymakers still use old formulas, such as GDP per capita, to decide on eligibility for debt relief. Private sector participation is a problem, as so far they have not responded to the invitation to join DSSI voluntarily. State-subordinated debt instruments that allow governments to suspend their debt when necessary are still not common.

For the provision of liquidity: IMF emergency facilities are welcome and adopted by many countries due to their severe shortage of liquidity. However, this is not enough. The IMF has a total of $ 1 trillion in these funds. Developed countries have had over $ 9 trillion for stimulus packages. To increase the provision of liquidity, a new issuance of Special Drawing Rights (SDRs) and the voluntary reallocation of existing and unused SDRs from developed countries to countries in need were proposed. However, the IMF board could not reach an agreement, reflecting the need to reform the IMF quota system. The current situation is that the countries that need SDRs the most have the least, and the countries that need the dollars the most do not have access to the US Federal Reserve’s swap line. Thus, proposals are made to develop regional exchanges and specialized facilities, which take time to reach significant size.

For debt relief and restructuring: After decades of debate, there is no debt restructuring or insolvency regime for sovereign states, although there are such systems for businesses. The document recently released by the IMF 9IMF, “The International Architecture for Sovereign Debt Resolution Involving Private Sector Creditors – Recent Developments, Challenges and Options for Reform”, October 2020 recognizes this gap in the current debt architecture. It is an encouraging step forward. People would come back to the issue with each crisis, demonstrating the desire for a framework that would allow for faster and more equitable debt restructuring. But in the past, the IFIs (international financial institutions) have insisted that the current system is efficient and sufficient. Debt relief and restructuring can be a long and expensive process. Patchwork and ad hoc sovereign debt restructuring agreements still prevail. Debt relief instruments such as debt buybacks and different types of debt swaps should always be handled with care to avoid legal complications and credit downgrades. However, if the country is insolvent, restructuring and debt cancellation would still be necessary.

After a major economic crisis, the global financial architecture has always undergone significant changes. I think this pandemic will be no exception. The gaps and imperfections in the international debt architecture make it difficult for the system to cope with a crisis of such depth and magnitude, including the lack of a rights-based approach to debt. man in the prevention and resolution of debt crises.

The references

1Daniel Gerszon Mahler, “Updated Estimates of the Impact of COVID-19 on Global Poverty,” World Bank Blogs, June 8, 2020.

2UNCTAD, “The shock of Covid-19 in developing countries”, March 2020.

3 IMF, “The Changing Public Debt Vulnerabilities in Low-Income Economies,” February 2020.

4World Bank, “Debt Service Suspension and COVID-19,” Backgrounder, May 11, 2020.

5M. Ayhan Kose et al., “Caught in a Debt Wave: Past Debt Crises Can Teach Developing Economies to Cope with COVID-19 Financing Shocks”, Finance and Development, flight. 57, n ° 2, June 2020.

6Jubilee Debt Campaign, “Sixty-four countries spend more on debt payments than on health,” April 12, 2020.

7Bryn Battersby, W. Raphael Lam and Elif Ture, “Tracking the $ 9 trillion global fiscal support to fight COVID-19,” IMF Blog, May 20, 2020.

8Martin Mühleisen, Vladimir Klyuev and Sarah Sanya, “Courage Under Fire: Policy Responses from Emerging Markets and Developing Economies to the COVID-19 Pandemic,” IMF Blog, June 3, 2020.

9IMF, “The International Architecture for Sovereign Debt Resolution Involving Private Sector Creditors – Recent Developments, Challenges and Options for Reform”, October 2020

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Moratorium: Supreme Court should not push for broader debt relief

The court asked the Center why it was “taking so long” to implement the compound interest exemption program promised on loans up to 2 crore rupees.

The chances of a further debilitating court-imposed burden on banks and the chess board in the form of broader borrower debt relief appeared to be diminishing on Wednesday. Hearing a batch of petitions asking for a waiver of interest on deferred IMEs during a six-month repayment moratorium that ended on August 31, the Supreme Court said, “We welcome the government’s decision to donate a helping hand to small borrowers, ”but stressed that the decision should be implemented at the earliest.

The court asked the Center why it was “taking so long” to implement the compound interest exemption program promised on loans up to 2 crore rupees. He asked the government to present the notifications / orders by November 2, the next hearing date.

At a previous hearing, the court said the project was “unsatisfactory” and asked the government and the central bank to record the action taken on the KV Kamath committee report on debt restructuring. He even urged the governmentRBI take into consideration the questions raised by real estate associations and electricity producers faced with the increase in the weight of their debt.

As previously reported by FE, waiving compound interest under the scheme proposed by the Center in an affidavit would cost the Center only Rs.6,500 crore. However, the government had said in an affidavit that extending interest relief to all “all types of loans for all categories of borrowers” would result in a huge charge of Rs 6 lakh crore on banks, wiping out probably a large part of their net worth. and even make most of them non-viable.

Last week, the government and the RBI had ruled out any further waiving of interest on interest, or its composition, as this will entail significant economic costs that cannot be absorbed by banks without seriously damaging their finances, which in its turn will result in significant economic costs. round will have huge implications for depositors. and broader financial stability.

Refusing to give a month to implement the interest relief on loans of up to Rs 2 crore, a judiciary composed of Judges Ashok Bhushan, R Subhash Reddy and MR Shah said: “Why would it take so much time to implement it? Common people are worried. Delaying is not in the interest of ordinary people. We are concerned about people with a loan of up to Rs 2 crore.

“We have always allowed the government to come back with instructions, but it is not in the interest of the people to continue to delay once you decide. Please see the plight of an ordinary man. You haven’t given any orders to anyone. You should have done it at the banks, ”the judges observed.

Solicitor General Tushar Mehta told the bench that the outer limit for granting relief is November 15. “It’s a bit hard for the government. We have nothing to gain by delaying the implementation… The banks will waive the interest on the interest and will then be compensated by the government and the calculation will have different terms. We’ll have to make sure the bank gives us an appropriate format. All this will take time to calculate the interest to be paid by the government to the banks, “argued the SG, adding that” November 15 is the outer limit for implementation, but the government will try to implement it again. earlier than that ”.

Senior lawyer Harish Salve, representing the Indian Banks Association, echoed similar views, saying the large number of loans issued in the “up to Rs 2 crore” category makes the process somewhat time consuming and that there is no doubt about the implementation of the government’s decision. “The complexity is such, it takes time,” he added.

The government reiterated that banks are fully empowered to resolve Covid-19 stress and tailor reliefs to individual borrowers, other than large borrowers, by providing various concessions / relief, in terms of changing the interest rate. or by taking discounts.

Under the RBI’s special window, lenders are allowed to recast loans to stressed individuals and businesses without classifying them as non-performing, provided they set aside 10% provisions on those advances.

On September 3, the SC ordered banks to report loan accounts that were not NPAs by August 31.