Dionne Rose, Staff Reporter
CHAIRMAN OF the National Insurance Fund (NIF), Easton Douglas, is defending the board's decision to use $1 billion of the fund to support loans for small and medium-sized enterprises.
Governor-General Professor Kenneth Hall, during his Throne Speech outlining the Government's policy for the 2006/07 legislative year, had said that the Government would be giving greater focus to small and medium-sized businesses through the allocation of monies from the NIF.
But last week, Oppostion Leader Bruce Golding raised strong objection to the decision to invest public servant's pension contributions to provide small business loans.
Mr. Golding said his objection was based on the fact that small businesses are at times categorised as high risk.
The Opposition Leader was particularly upset when Dr. Omar Davies, Minister of Finance and Planning, revealed that funds for lending would not be guaranteed by the Government.
But on Monday, Mr. Douglas told The Gleaner that the allocation of the $1 billion for small businesses was part of the business investments that the NIF will be engaging in for this year.
He informed that the money would be distributed through reputable institutions such as credit unions and other Government lending institutions.
Mr. Douglas also projected that the fund would grow from this investment.
Mr. Douglas stressed that it would be a loan and that it was indeed expected that there would be returns from the investment.
"This is not something that is being done frivolously," he argued, stating that it was a well thought out decision.
Responding to concerns raised by Mr. Golding about the venture being 'high risk', Mr. Douglas pointed out that, like all investments, there are risks, but that it would not be prudent to just have the money sit without investing.
