Jamaica Promotions Corporation (JAMPRO) and the Development Bank of Jamaica Limited (DBJ) today (Nov. 24) signed a Memorandum of Understanding (MoU) for a US$20 million loan facility, which will facilitate investment in the Information and Communications Technology (ICT) sector.
The agreement, which was signed during a ceremony at the offices of the Ministry of Industry, Investment and Commerce in New Kingston, is intended to support the expansion of Business Process Outsourcing (BPO). The facility will be administered by the DBJ in collaboration with JAMPRO.
Portfolio Minister, Hon. Dr. Christopher Tufton, said the objective is to generate more employment by creating adequate space for the expansion of existing BPO businesses.
He stated that the loan facility is vital to the Government’s efforts to increase developmental support to more than 26 BPO operators in Jamaica, which, it is anticipated, “will shortly result in the formation of a vibrant industry association (which) we are expecting to launch hopefully before the end of this year.”
“The Government is providing this financing support in order to develop at least 350,000 square feet of appropriate ICT ready space to accommodate tier one operators in the ICT/BPO sector, which, in turn, is expected to generate, overtime, through the attraction of investors in the sector, an additional 10,000 new ICT jobs to the Jamaican economy,” he stated.
The line of credit will be funded by a loan from the Petro Caribe Development Fund (PDF), which has been designated to be used for development projects and assist entities, which are critical to Jamaica’ s growth plans.
Entrepreneurs can access a maximum of US$5 million per project, representing 70 per cent of the total project cost. The rate of interest will be 4.5 per cent per annum on the reducing balance, with monthly payments up to a maximum of 12 years.
“The facilities, which are to be constructed under this loan scheme, must be used for ICT/BPO projects for the duration of the loan. If there is a change of use of the building before the loan is fully repaid, the interest rate will be increased to 6.5 per cent per annum, therefore acting as a disincentive for the facility to be used for anything else,” Dr. Tufton pointed out.
Under the agreement, JAMPRO will be responsible for screening investors interested in building ICT facilities, review proposals, and refer suitable loan applicants to the DBJ.
The DBJ is charged with conducting due diligence, credit checks and financial evaluation of applicants referred by JAMPRO. The entity will also have authority for the approval and monitoring of loans.
By Alecia Smith-Edwards, JIS Reporter