Bank Loans Do Not Fix the Lives of Those Affected by Irma

Following Hurricane Irma, which flooded part of Havana, residents tried to save their furniture and appliances by drying them outdoors. (14ymedio)

14ymedio bigger14ymedio, Zunilda Mata, Havana, 20 October 2017 — On a corner of Centro Habana an old sofa displays its swollen slats and next to it lie the paddles of a fan. These are the remains left by Hurricane Irma’s flooding of the area, the belongings of families that now apply for bank loans to recover, although the money barely covers a part of the damages.

At the Metropolitan Bank on Galiano at San Jose Streets, customers gathered on Friday looking for answers. News spread by several national media the previous day revived the expectations of those who lost their furniture and appliances when the fury of the sea covered the streets of the San Leopoldo neighborhood.

The vice president of the Central Bank of Cuba, Francisco Mayobre, told the Cuban News Agency (ACN) that, hours after the hurricane, survivors had been given loans totalling 28,700,000 Cuban pesos (CUP) “for the acquisition of material resources” for the construction and repair of homes.

The official pointed out that in one week, from 9 to 16 October, the total amount of credits allocated doubled “due to progress in the process of identifying the affected families, and through the intense efforts of bank workers to approve the loans within 24 hours.”

Mayobre also detailed that up to now, 9,054 loans have been paid out to people from the banks of Credit and Commerce, Popular Savings and Metropolitan. “The largest amount of money loaned out is concentrated in Villa Clara, Ciego de Ávila and Sancti Spíritus,” the provinces most damaged by the storm.

According to the current exchange rate governing transactions between Cuban pesos (CUP) and convertible pesos (CUC), the amount borrowed represents only 1,195,833 CUC (slightly less than two million dollars) and amounts to an average of 132 CUC (about the same in dollars) for each beneficiary.

The majority of those affected use the money to buy construction materials because bank loans have not yet been authorized for the purchase of household appliances and other household goods, although there are those who dare to buy other types of products with the money they borrowed, despite the risk of being subject to an inspection.

In mid-September, the government announced that it will finance 50% of the price of construction materials for those affected by the total or partial destruction of their homes after the hurricane. 

However, the products this benefit can be used to purchase are only those sold by the state, where the choices are few and supply is affected by corruption and diversion of resources (i.e. theft).

“I lost the kitchen counter because of the sea,” says Luisa Sampedro, a resident of San Lázaro Street, who laments, “they tell me that they only have floor tiles, so I’ll have to do it with that or go to the ‘mall’,” (stores selling in convertible pesos, which Cubans call by the English word).

A square yard of the tiles that Sampedro needs for his counter costs about 20 CUC in the hardware stores that sell in convertible pesos, so a loan from the bank is only enough to buy fewer than seven square meters. “It’s not enough money,” he says.

It was recently announced that the European Commission has approved a $826,000 project to repair damaged houses in the municipality of Yaguajay, but Sampedro does not believe that he will benefit from the initiative to be implemented by the United Nations Development Program UNDP).

“There are too many people with problems,” he says. “I live in a low lying area where there is a lot of humidity and I have to cover the walls halfway up in tile,” he says. He has not yet decided whether to go to the bank to apply for a loan and can not do so until he has been accepted as an applicant, a long and tortuous process.

An employee of the banking branch at Galiano and San José Street told 14ymedio that “work groups have been formed for the victims in each People’s Council” area. Those affected in San Leopoldo should go to an office on Dragones street to request that an inspector visit their home and prepare a “technical file.”

“From there the process begins and here in the bank we can grant the loan,” emphasizes the worker.

The bank is the last step of a broad working group that dictates who is a victim. The loans that are given to these people charge 2.5% interest and do not require guarantors.

Meanwhile, some of those affected by the hurricane are desperate for the state to begin officially granting credit for the purchase of appliances and other household items.

A few yards from the house of Luisa Sampedro, a family shelters their old Soviet-made Aurika brand washing machine from the sun. “We spent days and days seeing if we could manage to fix it,” says the owner of the house. The woman insists that she cannot afford to acquire a new machine.

In state stores a semi-automatic washing machine is around 250 CUC and the most sophisticated can exceed 600. “I can’t ask for a bank loan to pay that,” explains the Havanan. “The only thing left is to see if I can repair the machine myself or to pay a mechanic to see what he can do.”

Children play hide and seek around the metal casing. From time to time the grandmother of the family asks a neighbor if he knows where the social workers are who are “writing down the effects. Her dream is to get the loan in her name. “I have only a few years left and no one is going to charge me on the other side,” she said.