Jamaica
News - Real Estate - Finance (July 23, 2004)
NCB launches $716-m small business loan
National Commercial Bank (NCB) on
Tuesday announced a $716 million loan programme for start-up companies, and for
small to medium-sized businesses that are already established.
The bank says that companies will find it
easier to gain access to these funds, because the programme will not have the
normal strict conditions that normally accompany regular loans.
"We want to make poor people with good ideas
become rich," said Aubyn Hill, NCB's managing director at the launch of the
new venture called NCB-Small & Medium Enterprises (SME). The announcement
took place at the Hilton Hotel in New Kingston.
The SME will lend between $4 million and $10
million to qualified businesses, allowing them up to eight years to repay the
debt, with the apparent objective of targeting companies with good products and
viable plans, but which would not necessarily qualify for normal loans.
"It is for persons that need guidance but do
not need a string of conditionalities," said Hill.
Approximately half or J$350 million of the
($716 million) available in the pool will be loaned in Jamaican currency - and
the rest is in United States (US) dollars, some US$6 million. The interest on
the US dollar loans are 10 per cent, while the local currency debt will attract
an annual rate of 20.25.
The SME will accept non-cash forms of security,
including land and motor vehicles. For start-ups, it will wave the service
charge for three months.
The loan scheme launched by NCB follows that
announced by the bank's main rival, Scotiabank Jamaica three months ago. However
an important difference is that start-up companies do not qualify to tap into
Scotia's $1 billion small loan facility.
At the launch, industry minister Aloun N'dombet
Assamba noted that NCB's entry in the small to medium sized market as well as
that of BNS, signaled a positive development for the sector that was one of
Jamaica's largest providers of employment.
"It is these businesses that are at the
heart of competitiveness," said Assamba. "Many people for a long time
felt that they could not go to the banks for loans because the men and women in
suits did not have the time of day for them."
Last year some $936.6 million was loaned to the
small and micro business sector from wholesale lending agencies and
non-traditional government credit sources. This was 17 per cent more than the
previous year.
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