The National Insurance Fund said on Monday that it will earn a return of four per cent per annum on a second credit line of J$1.5 billion to the Development Bank of Jamaica for lending to small and medium-sized entities.
The return is the same as that earned on the first loan of J$934 million issued in 2006 and used principally for lending to agriculture, agro-processing, manufacturing, manufacturing services, trading, and work study.
The agricultural sector received the major share of the disbursements - 33 per cent.
The line will run for five years, expiring in April 2018. Returns are only expected on amounts taken up, said NIF senior director of investments, Audrey Deer-Williams.
She said that the return will not affect the investment targets of the fund.
"It was budgeted for, so we would have already assessed impact and factored those in our projections," Deer-Williams said.
The line will operate as a revolving fund over the five-year period.
Under the last disbursement, the funds were on-lent by the DBJ through approved financial institutions, including commercial banks, the National People's Cooperative Bank, credit unions and microfinancing institutions.
A maximum of J$15 million was disbursed per entity or group at a 10 per cent fixed interest rate. Eligible SMEs received up to seven years to repay.