Growth & Jobs | Tourism Enhancement Fund - Improving Business for SMTEs
The managers of Small and medium tourism enterprises (SMTEs) across Jamaica are benefiting from the Tourism Enhancement Fund (TEF) loan product, through the support of companies such as JN Small Business Loans (JNSBL).
Gillian Hyde, general manager of JNSBL, stated that "the TEF's mandate is to promote growth and development in the tourism sector as it strives to improve the management of environmental resources, enhance the country's overall tourist experience, and contribute to the sustainable development of the sector."
To date, TEF has benefited some 296 entrepreneurs, to the sum of $676 million; and JNSBL administers a segment of the loan, offering borrowers three key loan options.
"One component of the TEF is designed for single operators, partners and companies, with a minimum of 30 per cent of their businesses committed to goods and services for the tourism sector," explained Hyde. "From this component, beneficiaries can receive a maximum loan sum of $5 million at an interest rate of five per cent per annum on the reducing balance, with up to five years to repay."
Another element is the transportation loan, which assists contract carriage operators specific to JUTA, JCAL and MAXI association members to purchase vehicles or refinance existing loans. The maximum available under this programme is $2 million at an interest rate of five per cent per annum, for up to five years.
"There is also an energy efficiency loan programme, marketed as the JNSBL EcoSmart Loan. It is interest-free and, lends a maximum of $2 million, inclusive of the cost of the energy audit, for four years, as well as a three-month moratorium on the repayment of the principal. The equipment being purchased must be energy-saving," Hyde pointed out.
She also revealed that last year, "JNSBL began offering a community tourism loan to residents of Treasure Beach in St Elizabeth, working in the industry to foster community tourism, on behalf of the TEF. Successful applicants were able to access up to J$2 million with an interest rate of three per cent per annum, for a maximum term of five years."
Grateful for TEF loans
Two of the numerous small and medium tourism enterprises (SMTEs) who have benefited from Tourism Enhancement Fund (TEF) loans include Rodger Brown, managing director of Herald Printers, and Beulah Kelly, one of the partners of Kelly's Water Sports.
Printer and lithographer Rodger Brown operates Herald Printers in Kingston with 39 employees, primarily serving the local hotel sector. He benefits from the fact that his clients include large international hotel chains, which place substantial orders. However, the challenge for his 95-year-old company is that the competition comes not only from Jamaica, but also countries such as Mexico and the Dominican Republic.
"We compete with printers in larger economies who can retool and be more efficient," noted Brown. "This has forced us to become more creative, to focus on our strengths; and be 'customer-centric'."
He welcomes the assistance from the TEF, designed to assist SMTEs and provide services to entities in the tourist industry. "Our TEF loan enabled us to negotiate with suppliers for raw material at preferred rates, and, to meet the printing needs of one customer in particular, who expanded his property from 340 to more than 1,000 rooms," Brown explained.
Beulah Kelly, a partner in Kelly's Water Sports, whose company employs 25 persons, has been operating in Montego Bay since 2011. She opines that the TEF loan is beneficial for SMTEs because it facilitates expansion of their enterprises.
"The TEF came along when we were trying to expand," explained Kelly. "We needed to purchase a new boat for parasailing; however, we didn't want to use up all of our existing funds, as it would leave us in a difficult position."
She said that it was during her visit to the Tourism Product Development Company, that she learnt about the TEF loan facility administered by JNSBL.
"We have now taken out a second loan to purchase additional equipment. The TEF is beneficial to SMTEs because it allows us to grow and, consequently, for Jamaica to offer a more competitive tourism product," she added.