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The Government is to provide $2 billion, through the Development Bank of Jamaica (DBJ), to fund loans to micro, small, and medium sized enterprises, Prime Minister the Hon. Bruce Golding has announced.
Speaking in the 2009/10 Budget Debate in Parliament on Tuesday (May 5), Mr. Golding said the DBJ will make $1 billion available, through approved financial institutions (AFIs), to provide loans, ranging from a minimum of $500,000 to a maximum of $10 million, to small and medium enterprises.
The DBJ will also provide an additional $1 billion, for loans to some 20,000 micro-enterprise operators.
The Prime Minister explained that the DBJ, in providing a “special wholesale window” for small and medium-sized enterprises, will facilitate loans to these stakeholders for a maximum of five years, at an interest rate of 12 percent per annum. They will be assisted in meeting the criteria for selection.
“In order to address the collateral deficiency of many SMEs, the programme will be supported by a credit enhancement facility to minimise the risks to the AFIs, and enable them to make greater use of non-conventional credit assessment methodologies in approving loans to SMEs. Under this arrangement, many who cannot meet the collateral requirements will now be able to get loans to get their businesses going,” the Prime Minister said.
Last year, the DBJ, in partnership with micro lending institutions, provided $200 million to finance small scale-loans averaging $50,000 to 4,347 micro-enterprise operators. The institution also disbursed some $2.1 billion of $2.8 billion approved for 243 SMEs, at an interest rate of 10 percent per annum.