Tuesday, March 10, 2009

Banks need to stop shafting farmers

Good on Federated Farmers president Don Nicolson for speaking out about the banks' appallingly high interest rates.

Farmers will have been sickened by the cuts offered to small home owners and other businesses while their own banks have made little to no significant cuts to their overdraft and mortgage rates.

The irony being that economists are lauding the potential of economic recovery coming from the rural hinterlands as they hope we expand and grow our operations. This is all good news for the banks so you would think they would move quickly to invigorate more growth - alas this has not been the case.

And what has been the reason for their sloth like grasp of interest rates? None other than greed. Shifting banks is a complicated exercise and one many farmers are loath to take on but you have to ask yourself if this wouldn't change if there was more competition in the market and if farmers were more willing to vote with their feet.

For too long the banking sector has been complacent about its rural clientele - yet relying on the sector to prop up its bottom line.

But as Nicolson suggests, enough is enough, and even the most loyal of clients will prove fickle if their bottom line is compromised by the inadequacy of their bankers.

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