JIS News

The Senate yesterday (Jan. 23) passed a Bill to amend the Agricultural Credit Board Act in order to remove the grant and loan-making functions from that body.
The Bill also proposes to provide for the strengthening of the supervisory and regulatory functions of the board to develop adequate information, control, evaluation and reporting systems to facilitate greater accountability and effective management. It will also establish criteria regarding the minimum standard of solvency to be maintained, and to provide for the qualification requirements of auditors of agricultural loan societies, the frequency of audits and the provision of information by auditors to the board.
The amendments also seek to empower the board to prescribe interest rates and general terms and conditions in respect of the granting of loans by agricultural loan societies under the Act, and set policy procedures to recover unpaid loans.
Attorney General and Minister of Justice, Senator A.J Nicholson, who tabled the Bill, explained that the Act was originally established to provide the framework for the Agricultural Credit Board to regulate, supervise and monitor the operations of the People’s Cooperative (PC) banking movement in Jamaica, as well as to encourage the establishment of new entities.
He pointed out that in its present form, the Act restricted the PC banks from achieving their goal of being independent, self sustaining and profitable institutions, therefore, the Bill sought to “strengthen the regulatory and supervisory functions of the Agricultural Credit Board and at the same time, to revoke its lending functions which for some time has been assumed by the Development Bank of Jamaica (DBJ).
The Bill also seeks further, to exempt the board and agricultural loan societies from general consumption tax, stamp duty, income tax and certain recording and registration fees. In respect of agricultural loan societies, this exemption would include the fees payable under the Companies Act in respect of assets of these societies.
“The PC banks have played a significant role in the development of rural communities and have improved the lives of Jamaican small farmers who have for many years accessed funding for agricultural projects through their banks,” Senator Nicholson told the Senate, adding that the Integrated People’s Cooperative Bank Network programme, which was established in 1994 to develop the PC banking movement into viable and sustaining entities, had achieved a fair measure of success.
“Since the implementation of the programme, the PC Banking movement has experienced significant growth in its membership, paid up share capital, savings, and loan portfolios,” Mr. Nicholson informed. He informed that as at March of last year, membership stood at 192,891 up from 108,776 in 1994, while share capital stood at over $51 million compared with nearly $9 million in 1994.
Meanwhile, Senator Nicholson pointed out, the PC banks’ savings portfolio was reported at nearly $5 million as compared with just over $2 million in its start-up year and the movement’s loan portfolio, which was over $200 million in 1994, has since moved to $800 million. Also in March last year, there was a reported 76,170 savers, up from 4,292 in 1994.
Senator Nicholson further said the role of the PC banking movement in the development of the country’s economy since 1994, had been “telling” as these institutions had on many occasions provided the main conduit for government funding to small farmers, particularly in times of major disasters.
Meanwhile, Opposition Senator Norman Horne submitted that the Agricultural Credit Board had lost its purpose and should be disbanded.
He argued that the regulatory functions of the board could easily be executed through a committee set up by the DBJ, stating that this would ensure greater levels of efficiency, cost effectiveness and prevent overlapping of functions.

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