Gov't to get unclaimed $15 billion next year - Funds in dormant accounts to aid MSMEs
Plans are on track for the Government, by next year, to access at least a third of the estimated $45 billion in unclaimed funds lying dormant in accounts of local commercial banks.
"Tomorrow (today) between 10 a.m. and 12:30 p.m., we are going to negotiate with the bidder. We have selected the bidder and are going to negotiate price, and hopefully, the consultant will be on board in two weeks to start work on this, with a view to completing their work within four months," Oral Shaw, principal director of the Micro, Small and Medium Enterprises (MSME) unit in the Ministry of Industry, Commerce, Agriculture and Fisheries disclosed yesterday.
"This is with a view to making recommendations about how the money should be used, how the fund should become operational so that Government can get access to this money by the start of the next fiscal year."
The director at the first quarterly meeting of the MSME National Planning Implementation Committee continued: "So this $15 billion will not come, I think, before the year ends, because of the work to be done, but it will more than likely come if they come to the recommendation that it is efficacious and it is feasible to utilise unclaimed funds."
Shaw went on to explain that the idea of using the money in dormant accounts to provide affordable seed loan funding for MSMEs had received partisan support when it was first floated about many years ago.
The consultant with whom the Government will negotiate today was selected following submissions of financial and technical proposals from a short list via the public tender process.
15-YEAR PERIOD OUT OF SYNC
Portfolio minister Audley Shaw told the audience at the Knutsford Court Hotel in New Kingston that it was time to stop paying lip service to MSMEs, hence the decision to target the $15 billion that would be available for lending in the short term, with the aim of eventually claiming the full $45 billion.
The minister pointed out that the 15-year period before the money is remitted to the State's coffers was out of sync with the seven years for other jurisdictions and the five years which applies in the United States.
"Because of the time period, the banks find ways to apply charges upon charges. The account is dormant but the charges are not dormant, and so sometimes you lucky with how much money you end up with at the end of the day, after all of these charges are built up over time," said Shaw.
While the review to be conducted by the consultant will look into a strategy for reducing the time limit by half, which if done now would provide the full $45 billion, the minister said he has plans for the amount which is expected to be accessible in the next fiscal year.
"Fifteen billion dollars would be made available immediately, which my recommendation is to create a special fund targeted at MSMEs, so that we can get loans at a reasonable interest rate, and when I say reasonable, I mean sub five per cent," the former finance minister declared.