MSMEs Urged to Capitalise on Exim Bank’s Energy Loan

Operators of medium, small and micro enterprises (MSMEs) are being encouraged to take advantage of EXIM Bank’s Energy Loan to reduce operating costs and improve their bottom line.

Introduced in 2022, the Energy Loan is tailored for MSMEs within the productive sector, enabling them to access renewable energy solutions to power their businesses.

Speaking with JIS News, Acting Chief Executive Officer at EXIM Bank, Errol Barnaby, informed that the loan starts at $5,000,000 and goes up to a maximum of $50 million. The interest rate is 7.5 per cent with repayment over seven years.

The interest and principal are payable monthly.

The loan will fund up to 85 per cent of equipment purchase and installation.

“In July of this year, we tweaked it a little bit to take a bigger margin on the solar equipment being used as collateral. In the past, we used to use a margin of 60 per cent of the equipment as security, but now we have extended it to 85 per cent,” Mr. Barnaby said.

“This means the other 15 per cent will come from the borrower in the form of what they pledge as security to cover the loan,” he pointed out.

Mr. Barnaby said the loan product was developed specifically to treat with the situation of climate change.

He noted that, with businesses facing rising energy and operational costs, securing renewable energy sources should be viewed as a worthwhile investment by the productive sector.

“If businesses move away from their appetite for electricity in a traditional way and towards renewable energy, the returns would certainly be to their benefit in the long run. It is important for entities to take into account the impact of their bottom line if they were to consider investing in solar equipment and come to EXIM Bank to access financing for such,” he urged.

In addition to the loan, the Bank will provide support throughout the process of acquiring the equipment.

“The Energy Loan is not one where you just get the disbursement and you move towards acquiring the equipment on your own. We work with you from start to finish and that means until the complete installation of the equipment and to ensure that all the necessary financing has been met for you to move… from traditional energy,” Mr. Barnaby said.

To access the loan, businesses must be tax-compliant and registered for more than two years.

“You have to be in the formal system. This means you would have to come to us to fill out the application form and provide a business plan. We require financial reports in the form of your audited financial statements, cash flow projection and personal financial statement. We also get feedback from the Credit Bureau and look at the security that you would be pledging in addition to our 85 per cent margin that we’re taking,” he said.

For the list of documents needed in the application process, persons can visit eximbankja.com.

To apply, persons can visit the EXIM Bank location at 85 Hope Road or call 876- 630-1400 or 876- 618-5889.