JMA, EXIM partner on loans programme
National Export-Import Bank of Jamaica (EXIM Bank) has set up a $30-million loan facility for members of the Jamaica Manufacturers' Association (JMA).
Small and micro-size manufacturers can borrow for terms of six to 36 months "whether for working capital, receivables financing, equipment or raw material purchasing, or any other productive inputs that are required for manufacturing," JMA Executive Director Imega Breese McNab told the Financial Gleaner.
Applicants can finance their raw material purchase under the six-month loans, while equipment and spare parts upgrades are financed over the three-year period.
Companies must also be in operation for at least two years to access the credit window.
"Outside of the loan programme, companies also have access to (another) $1.5 million from EXIM," Breese McNab said.
Interest is calculated on the reducing balance on the unsecured loan at 12 per cent.
"In 2012 the JMA introduced a micro and small business grouping. Today, there are over 80 members in that special membership facility, and based on a needs assessment, financing always came out as number one in the area that they need assistance with," the executive director said.
"When we asked the companies, 'If you could get money tomorrow, what would you want it for?', they told us equipment, raw material purchasing and production," she said, noting the loan programme was structured to bring financing within the reach of the small and micro sector.
"A lot of them weren't able to access the facilities because they are companies that are earning probably less than $10 million and employing less than five persons, so they weren't able to access those facilities that needed collateral requirements," said Breese McNab
If the current facility works well, the partners are open to expanding the amount of credit available for lending to manufacturers, she said.