TEF offering 5% loans to tourism suppliers
The Tourism Enhancement Fund on Monday introduced a new J$100 million revolving loan fund and signed Jamaica National Small Business Loans Limited (JNSBL) to administer the programme.
The Five by Five Development Loan Fund is targeted at small suppliers of goods and services to the tourism sector. Loans of up to J$5 million will be offered to small tourism businesses under a five-year repayment plan at five per cent interest per annum, with a six-month moratorium on the principal.
Interest is calculated on the reducing balance.
The Ministry of Tourism, which has oversight of the TEF, says this is the third J$100-million fund offered over three years. It said, however, that not all the funds were taken up under the first two tranches, from which loan subscriptions amounted to J$186m of the J$200m made available.
JNSBL will not add a margin to the loan, but will instead earn a fee.
"TEF will be paying JNSBL to administer the loans, at five per cent, hence that cost is passed on to the borrower," said the tourism ministry Tuesday.
"This initiative gives energy to a wider policy programme and objective that we have of achieving five million arrivals and earnings of US$5 billion in five years, and so we have named this particular loan programme 'Five by Five' because it is about providing an additional window of opportunity for the suppliers," said Tourism Minister Edmund Bartlett at Monday's signing.
"To be able to access loans at five per cent for over five years is what gives value and true meaning to our objective of enabling a wider group to become involved in the supply chain," he said.