JIS News

Minister of Finance and the Public Service, Hon Audley Shaw, has said that his Ministry is widening the Development Bank of Jamaica’s (DBJ) credit window to facilitate lending to farmers through credit unions.
“What we have done is to suggest to the Development Bank of Jamaica that some of the money that is to on lend, should not just go through the PC Banks, but lend some of the money through the credit unions as well,” he said.
Mr. Shaw made the announcement on Wednesday (December 9) while addressing the Christiana Potato Growers Co-operative Association’s 31st Annual General Meeting, at the Association’s Conference Room in Christiana, Manchester.
He said that as a result of his Ministry’s intervention, $150 million will be made available to the credit unions for on lending to farmers.
He said that the aim is to make money available for lending through various channels such as the Micro Financial Institutions, People’s Co-operative Banks (PC Banks), Credit Unions and traditional commercial banks.
“So the idea is that we are going to make money available through various different windows. You have the PC Banks and then you have our outstanding mainstays in terms of our commercial banks,” he argued.
Mr. Shaw said that the level of PC Banks’ credit to small farmers was totally inadequate, and their lending policies needed revision, in order to make credit more accessible to farmers.
The Finance Minister said that coming out of the talks with the International Monetary Fund (IMF), there was an agreement that farmers and manufacturers cannot continue to borrow at double digit interest rates.
“The IMF agrees with me and, as I have constantly said that, we cannot be thinking that while, for the rest of the world, their farmers and their manufacturers are getting interest rates at five, six, seven and eight per cent, but in Jamaica we believe that our farmers must be borrowing money at twelve and fifteen per cent,” Mr. Shaw stated.
“People who want to go into manufacturing cannot be borrowing money at twenty-five per cent, it cannot work. It just cannot work; and the rest of the world is out there at single digit interest rates? It cannot work”, he said.
He also projected that the public debt of the country will be managed to ensure that interest rates are lowered.
“We are going to manage the public debt in such a way that interest rates will have to go down,” he said.
The Minister stated that there is no other way to bring interest rates down, but that there is going to be some pain.

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