Kingston, Jamaica — Recent rumours circulating on social media claim that Jamaican banks have “paused lending” after Hurricane Melissa. However, official publications, ratings-agency reports, and public announcements from major financial institutions do not support that claim.
What the data shows is not a freeze, but slower, more cautious lending, especially in the areas most severely affected by the storm.
Hurricane Melissa: The Economic Context
Hurricane Melissa hit Jamaica on 28 October 2025 as a Category 5 system, causing severe damage to homes, businesses, infrastructure, and agriculture.
According to publicly reported Government estimates, the disaster caused losses equivalent to around 30% of GDP.
This scale of damage naturally affects banking activity, but it does not mean that the banking system stopped issuing new loans.
Mortgage Lending Was Growing Before the Hurricane
Public reporting from the Bank of Jamaica (BOJ) shows that:
- The value of new mortgages grew strongly in 2024, compared with 2023.
- Mortgages were among the most active segments of the household loan market.
- Loan quality indicators remained generally stable before the storm.
A number of articles from local media also highlighted that mortgage lending was one of the bright spots in Jamaica’s credit market going into 2025.
System-Wide Lending: Slower, Yes — But Not Frozen
Independent macro-financial assessments also point to moderation rather than contraction.
- S&P Global Ratings reported that overall loan-portfolio growth in the banking system slowed between 2023 and 2024, but remained positive.
- IMF reviews of Jamaica’s financial system describe the sector as well-capitalised, liquid, and resilient, with risks coming primarily from interest-rate pressures and climate shocks—not from any inability to lend.
There is no official directive from the BOJ or the Government ordering banks to suspend new lending.
What Actually Changed After Melissa
1. Extremely high levels of damage
Public estimates place economic losses in the tens of billions of Jamaican dollars. Insurance payouts will cover only a portion because of low levels of insurance penetration.
2. Disaster-Risk Financing Was Triggered
Jamaica’s disaster-risk tools activated automatically, including:
- A World Bank-arranged catastrophe bond, which triggered a major payout to the Government.
- A CCRIF Caribbean insurance payout, based on rainfall impacts.
These payouts support the Government’s emergency and recovery spending—they do not restrict banks from lending.
3. Borrower Relief, Not a Lending Freeze
Some institutions introduced temporary payment deferral programmes for existing customers affected by the hurricane.
Examples include:
- Loan-payment moratoria for members impacted by the storm
- Temporary deferral options for eligible retail customers
These programmes help borrowers manage hardship. They are not statements of a halt to new credit.
What Major Institutions Have Publicly Indicated
Banks and credit unions continue to promote:
- Mortgage loans
- Personal loans
- Business loans
- Home-construction and home-improvement loans
Public statements from several major institutions continue to highlight active lending portfolios, ongoing mortgage offerings, and investment in lending systems.
None has issued a statement announcing a system-wide suspension of new loans.
Why It May Still Feel Like Banks Are on Pause
Even though lending continues, many Jamaicans experience delays or tighter checks. This can create the impression of a “pause,” especially in hurricane-affected areas.
1. Lending Growth Is Slower
System-wide data shows that lending growth has moderated, which means fewer approvals are going through compared to previous years.
2. Risk Checks Are More Detailed
In damaged communities, lenders must verify:
- Property condition
- Borrower income stability
- Construction plans
- Insurance coverage
These checks can extend approval times or increase the number of declined applications.
3. Borrower Moratoria Cause Confusion
People may hear “I’m not paying my loan right now,” but this usually refers to deferral programmes, not a stop to new business.
Clear Bottom Line
Based on public information from the BOJ, international institutions, and published media:
- There is no evidence of a nationwide “pause” in bank lending.
- Mortgage lending was growing strongly before Hurricane Melissa and remains a core part of bank loan portfolios.
- Banks are still issuing new loans, but with more caution and slower growth, especially in areas with significant storm damage.
- Borrower relief programmes apply to existing balances, not new lending.
Disclaimer
This article uses information available in public reports and reputable news sources.
It is provided for general information only and does not constitute financial advice or represent the official position of any bank or government agency.
Lending policies may change, and individual outcomes depend on personal circumstances.