Friday 15 November, 2019

NCB, USAID agree to US$25m partnership to stimulate SME growth

Minister of Industry Audley Shaw (standing, centre), witnesses the official signing ceremony between USAID NCB. Signing (from left) are Deputy Chief of Mission, United States Embassy, John. W. McIntyre; Assistant General Manager, NCB, Stuart Reid; Assistant Administrator for the Latin America and the Caribbean Bureau, USAID, John Barsa. Others (background) are Senior General Manager, NCB, Brian Boothe (left); and Country Representative, USAID (Jamaica), Jason Fraser.

Minister of Industry Audley Shaw (standing, centre), witnesses the official signing ceremony between USAID NCB. Signing (from left) are Deputy Chief of Mission, United States Embassy, John. W. McIntyre; Assistant General Manager, NCB, Stuart Reid; Assistant Administrator for the Latin America and the Caribbean Bureau, USAID, John Barsa. Others (background) are Senior General Manager, NCB, Brian Boothe (left); and Country Representative, USAID (Jamaica), Jason Fraser.

The National Commercial Bank Jamaica Limited (NCB) and the United States Agency for International Development (USAID) have entered into a partnership valued at US$25 Million or JMD$3.4 Billion.

Brian Boothe, Senior General Manager of NCB’s Corporate, Commercial & Consumer Banking Division said the NCB/USAID agreement marks the first-ever regional loan portfolio guarantee. Along with Jamaican entities, financing is also available to SMEs operating in Barbados, The Bahamas, Dominican Republic, Grenada, Guyana, St. Kitts and Nevis, St. Lucia and the twin-island republic of Trinidad and Tobago.

The guarantee agreement allows lending to registered SMEs with no more than 250 employees and gross annual sales not exceeding US$20 Million. The partnership agreement was signed on Thursday, October 31 at the NCB Wellness and Recreation Centre. 

 Boothe said that funding will also be available for investments in machinery, equipment, facilities, business expansion and small-scale irrigation system projects.

The Loan Fund under the agreement is available to SMEs who are customers of NCB as well as other banks and offers interest rates as low as 7% for JMD loans or 5% for USD loans with repayment terms up to 15 years.

Loan amounts are available up to JMD690 Million (US$5 Million) with guarantee amounts of up to JMD$345 Million (US$2.5 Million).

 Through the initiative, known as the Development Credit Authority or “DCA” Loan Portfolio Guarantee Agreement, assistance will be made possible to SMEs via access to funding for Energy Saving and Clean Energy Production Projects.

Boothe said that “SMEs are engines of job creation and are essential to strengthening our economy. Therefore, NCB has recognized that it is our responsibility to ensure we help create the optimal environment for such a critical sector.” 

Minister of Industry, Commerce, Agriculture and Fisheries, Audley Shaw, CD, MP, in an address lauded NCB and USAID for the initiative which he said had a massive potential to stimulate SME growth and subsequent national and regional economic development. 

 “I served for six years as Minister of Finance and one of the goals I set out was to bring the economy back to single-digit interest rates, so I am happy today to see that an initiative of this magnitude has achieved that. We are going in the right direction,” Shaw said.

The initiative also provides targeted support for the energy sector, with an even more narrowed focus on renewable energy in Jamaica and the Caribbean to help build resilience and economic self-sustainability.

 John Barsa, Assistant Administrator, Latin America & the Caribbean Bureau, USAID highlighted that the timing of the partnership is perfect as we currently navigate the 2019 Atlantic Hurricane Season. 

 

“The recent events that crippled our neighbours in The Bahamas, is a harsh reminder to Jamaica, the United States and the rest of the region of how devastating natural disasters can be. While these events are unavoidable, what we can do, is put resilient measures in place to lessen the impact on our resources. The US has identified that one of the major concerns within Jamaica and the region is to advance the resiliency and security of the energy sector,” said Barsa. 

 

The NCB/USAID agreement marks the first-ever regional loan portfolio guarantee. Along with Jamaican entities, financing is also available to SMEs operating in Barbados, The Bahamas, Dominican Republic, Grenada, Guyana, St. Kitts and Nevis, St. Lucia and the twin-island republic of Trinidad and Tobago. 

 

Barsa continued by highlighting that the partnership with NCB was birthed through a pledge of additional support for energy security, following a meeting last year with heads of CARICOM states. “This partnership is a testament to what can happen when the public and private sector come together to address common issues. This partnership will allow NCB, via the loan portfolio guarantee, to reduce [their] risk exposure and enable them to utilize their resources to increase lending for energy investments in Jamaica and the Caribbean,” Barsa concluded. 

The Loan Fund under the agreement is available to SMEs who are customers of NCB as well as other banks and offers interest rates as low as 7% for JMD loans or 5% for USD loans with repayment terms up to 15 years.
 

 

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