Lenders of money 'losing out'
Money lenders were losing out in spite of high interest rates, said the president of the Associated Chambers of Commerce (Mr J. R. Greenfield) on Tuesday.
Inflation deprived lenders of their profits. A lender who earned $4500 to $lO,OOO a year was taxed at a rate of 38c in the dollar.
Therefore if he lent money at 12 per cent his return; after tax was only 7.44 perl cent. If on top of this his! capita! depreciation at 12' ■ per cent a year because of: inflation, the lender, far! from making a profit, had a! loss of more than 4.5 per! cent on his investment. If a person lent $10,000 ! for five years at 12 per cent ! his net loss at the end of I the loan period would be; !SlOO3 — assuming continued; (inflation of 12 per cent a: year. I
! The lender was in a worse! ( position if he was in a high■er tax bracket. Mr Greenfield said that: i people should not complain! about high interest rates be-| (cause it was the lender who! supported the borrower.
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Press, 30 November 1978, Page 18
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184Lenders of money 'losing out' Press, 30 November 1978, Page 18
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