18-month extension on EXIM loan facility
Published:Sunday | July 18, 2010 | 12:00 AM
The National Export-Import Bank of Jamaica (EXIM), a financier of export companies, says a US$23 million short-term credit line introduced last year at eight per cent interest has been totally consumed, but demand is unabated.
The facility remains open for another 18 months, with new subscriptions funded from loan- payment reflows.
The US$23 million facility, which was initially funded primarily from capital from the Inter-American Development Bank (IDB), has been on the market since the start of calendar year 2009.
Usually, EXIM's short-term loans have a tenure of 180 days, or six months, but this credit line is on offer for 360 days.
All foreign-exchange earners are eligible for the loan, excepting those in construction and in the traditional sectors of sugar, banana and bauxite.
Foreign lines of credit
EXIM's chief marketing officer, Ann-Marie Walter-Allen, says loan applicants have come primarily from tourism, coffee, agro-processing, energy, and "a wide range of SMEs in manufacturing and business services".
The loans range from US$25,000 to US$5 million.
Typically, funds are used for working capital, upgrading of physical facilities, and equipment acquisition.
EXIM provides trade-financing facilities through several foreign lines of credit to facilitate the importation of raw materials, equipment, capital goods, technology and spare parts at up to 100 per cent of the value of the invoice.
Walter-Allen says due to the short-term nature of the IDB-financed facility, EXIM accepts bank guarantees from approved financial intermediaries and hypothecation of financial instruments - for example, cash deposits and government securities - primarily as collateral.
"On a case-by-case basis, mortgages over real estate, assignment of receivables, personal guarantees and other acceptable collateral may be accepted," she said.
Commitment fees are applied to all loans, ranging between 0.5 and one per cent of the loan amount.
Interest rates, the marketing officer explained, are reset every six months.
"With the JDX, interest rates are declining, and EXIM Bank continues to work towards sourcing even lower rates for Jamaica's exporters," said Walter-Allen.
"The facility will be open for another 18 months. However, we are confident that other sources of funds will become available to enable the bank to continue to service the export and wider productive sectors. Projections are for a similar take-up this year."