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  • Minister of Finance and Planning, Dr. the Hon. Peter Phillips, says the Government is committed to creating an environment that will enable the further lowering of interest rates in the banking sector.
  • The Minister was speaking at the Small Business Association of Jamaica (SBAJ) luncheon, held on May 27 at the Jamaica Pegasus Hotel.
  • Delivering his budget presentation in March this year, Dr. Phillips informed that for the current fiscal year of 2015/16, the DBJ has set a lending target to MSMEs of $4 billion.

Minister of Finance and Planning, Dr. the Hon. Peter Phillips, says the Government is committed to creating an environment that will enable the further lowering of interest rates in the banking sector.

“Those interest rates are trending down and they are trending down for a variety of reasons, but a main one is that the Government has restrained itself from becoming the main client of the banking system,” the Minister said.

He noted further that the Government has centralised its accounts in the Bank of Jamaica through the Central Treasury Management System, “so we don’t end up borrowing our own money from the banks at rates that cause difficulties for the Consolidated Fund.”

The Minister was speaking at the Small Business Association of Jamaica (SBAJ) luncheon, held on May 27 at the Jamaica Pegasus Hotel.

Dr. Phillips reiterated that even though interest rates are trending downward, there is a need for the rates to go down further.

“(The) rates are coming down, but they will have to come down further. Just this past week and the week before, the Bank of Jamaica reduced its signal rates. That will eventually flow through the banking system as a whole,” he noted.

Meanwhile, in terms of funding for the Micro, Small and Medium-size Enterprise (MSME) sector, Dr. Phillips informed that the Development Bank of Jamaica (DBJ) has exceeded its lending targets.

He noted that the DBJ approved loans valued at $3.3 billion to small and medium enterprises (SMEs) during the 2014/15 fiscal year, while for the micro sector, some $911 million was approved for loans.

Delivering his budget presentation in March this year, Dr. Phillips informed that for the current fiscal year of 2015/16, the DBJ has set a lending target to MSMEs of $4 billion.

In addition, the Minister cited the US$50 million Growth and Competitiveness loan project it has with the World Bank. He noted that of this amount, some US$23.2 million is for the provision of support to small business operations and providing technical support for small businesses.

“This is organised around a notion of strengthening supply chains, so that we can have linkages between big and small or between small businesses in the local economy (and) to enable Jamaica as a whole to become more competitive,” Dr. Phillips said.

He added that the project will fund a line of credit through the DBJ for on-lending to approved financial institutions and for loans to the SMEs, and will directly provide technical advice and assistance to the organisations.

The SBAJ is a private non-profit business organization registered in 1974 to foster the growth and development of businesses and professional groups and to represent the entire small and micro business sector.

The SBAJ represents businesses employing 1 to 50 employees and has an income turnover not exceeding US$5 million per annum.