NCB to offer cheaper Nation Builder credit line

• First loan pool underperforms

National Commercial Bank Jamaica (NCB) on Tuesday relaunched its Nation Builder credit line designed for small and medium-sized businesses.

Patrick Hylton, group managing director, said the bank will make a J$1-billion pool of funds available for loans at 8.5 per cent interest.

The initial credit line was also a J$1-billion pool, whose loans were priced at 9 per cent. But even at single digit interest rate, the bank only got subscriptions to about half of the pool.

The loan programme targets the bank's own SME clients and is complimentary to the NCB National Builder Awards issued annually in honour of steady successful businesses that are seen as contributing positively to the economy within their home communities.

The original Nation Builder credit line was introduced in 2009 at a time when businesses were clamouring for more affordable loans priced at single-digit interest rate.

NCB said the nine per cent funding window would have stayed open until December 2010.

Bernadette Barrow, assistant general manager with responsibility for NCB's SME division, said the first loan had a take-up of more than 50 per cent but that the actual number of SMEs who subscribed would not be made public.

"Based on the sensitivity within this segment, I am unable to provide this information," said Barrow.

"The product was introduced as a limited time offer in September 2009, offering support primarily to women in business and operations in established manufacturing and agriculture business. The total disbursement saw more than half a billion dollars in take-up. The industries that benefited were manufacturing, agriculture, distribution, professional and other services."

Four-month window

The new credit line will open for subscription on November 1 to businesses in operation for more than two years in the agriculture, manufacturing, ICT or tourism sector. Companies in any sector wanting to invest in energy-saving equipment or projects can also apply, but again the business has to be more than two years old.

The subscription window closes four months later on February 29, 2012.

Nation Builder loans range in size from J$500,000 to J$15 million and borrowers get five years to repay.

Hylton said at Tuesday's Nation Builder awards presentations that the offer will focus on assistance to the productive sector to grow business and to improve energy efficiency within established businesses.

Barrow said that, through the Nation Builder programme, the bank provides capacity-building support to small businesses in the form of training for managers and workers, as well as scholarships for some workers to obtain business degrees.

"The programme will be broadened and deepened to provide 300 businesswomen with skills training and coaching over a two-year period," said the NCB executive.

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