JIS News

The Government is to pursue discussions with private sector stakeholders, with a view to establishing a jointly owned investment lending institution to assist businesses having difficulties in securing loans from traditional banks, or the Development Bank of Jamaica (DBJ).
Prime Minister Bruce Golding told the House of Representatives on Tuesday (May 5), that Minister without Portfolio in the Ministry of Finance and the Public Service, Senator Don Wehby, has been asked to lead the consultations. He said that Senator Wehby has agreed to do so, even after he returns to the private sector later this year.
Explaining the rationale, Mr. Golding said the wholesaling of loans by DBJ through Approved Financial Institutions(AFIs) was not working as well as was hoped. He said that, apart from their preference for Government paper, many of the traditional lending agencies opt to lend their own money at higher interest rates and bigger spreads, rather than lend DBJ money at controlled margins.
“There is a clear need for a retail investment banking facility that can respond to the financing needs, especially of small and medium enterprises. The government cannot go back to retail lending – not on its own,” Mr. Golding said.
He also pointed out that the misfortunes suffered by DBJ predecessors, the Jamaica Development Bank (JDB) and National Investment Bank of Jamaica (NIBJ), could not be repeated.