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Some $420 million out of $825 million, which has been approved for disbursement under the National Insurance Fund (NIF) Credit Facility, was handed over yesterday (November 2), to eight public and private sector financial institutions for on-lending.
This exercise results from an undertaking given by Prime Minister Portia Simpson Miller in her Budget Debate presentation in May, to establish a $1 billion revolving credit facility, to provide loans to assist small and medium size business enterprises.
Minister of Labour and Social Security, Derrick Kellier, who spoke at the handing over and launching ceremony at the Knutsford Court Hotel in Kingston, said that this facility would be of great benefit to persons in the small and medium business sector, as well as the financial institutions involved.
“It is an important development for the Government, the Ministry of Labour and Social Security, the NIF, the network of public and private sector institutions, which will on-lend the funds, and the many micro, small and medium size businesses that will benefit from the facility,” the Minister said.
Mr. Kellier emphasized that the $1 billion credit facility was a prudent investment as small enterprise development held the promise for employment and income for thousands of Jamaicans, who otherwise would remain unemployed or underemployed.
“It is an investment in one of the most critical sectors of the national economy. It is an investment in job creation for thousands of Jamaicans. It is an investment in our people, who continue to demonstrate creativity in their business activities.we are investing in the expansion of business,” the Minister pointed out.
The establishment of the NIF Credit Facility, he added, was a positive step towards fulfilling the goal of providing productive employment for the vulnerable, particularly women and the young.
“Jamaica is a signatory to the 2005 declaration of the United Nations World Summit, which commits us to the goal of full and productive employment, including women and young people. The NIF is a tangible step towards achieving this objective,” he said.
He urged both the approved financial institutions and borrowers to make the best possible use of the NIF Credit Facility, and to pay attention to the guidelines that have been put in place to protect this investment.
“The Ministry, the NIF Board and Secretariat will be very vigilant in ensuring that the guidelines are adhered to. The Credit Facility must have the intended impact on reducing poverty and unemployment, driving the small business development, and bringing more persons into the National Insurance Scheme,” Mr. Kellier said.
The Minister noted that the National Insurance Fund was growing significantly. “At the end of March 2006, the Fund balance stood at $43.34 billion, compared to $39.28 billion at March 2005. This represents an increase of $4.06 billion or 10.3 per cent. However, when we look at the longer term, we see that for six years ended March 2006, the Fund grew by $29.76 billion or 219 per cent. This is an annual growth of 21.33 per cent. The forecast points to a healthy situation for the future,” he said.