EXIM's board of directors offers strategic objectives to develop productive sector

…announces wish list for further growth of the economy

BY ABBION ROBINSON
Observer Business Writer

Wednesday, September 11, 2019

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The National Export-Import (EXIM) Bank of Jamaica has formatted a strategy that it says will help the productive sector to perform better.

According to Director Norman Reid, the strategy is encompassed in a wish list with four objectives, the first of which is the overall restructuring of the bank.

“For the first time in a long time, I get the feeling that the Government is showing a type of commitment to SMES [small and medium-sized enterprises] and hopefully to the EXIM bank, to the point where I'm inclined to say that we're about to move from rhetoric to reality,” Reid said at the bank's annual strategic planning retreat, held at the EXIM Business Centre on Monday, September 9.

“We want the funds; there's this increased focus on SMEs and that is good, the country is on a growth path, and that is also good, and there's also unique opportunities for growth,” he continued.

As for the second objective, Reid indicated that EXIM's owners must provide the bank with cheap funding so that it can offer a single-digit interest rate.

“If we get the funding, we can hit the track running, as we did with the SMES [small and medium-sized tourism enterprises loan]; while all these initiatives are in place, we get the commercial banks to pull down their rates, but it takes them some time to adjust,” he said.

“First and foremost, all of it is that source of cheap funding that will ensure that once we say [interest rate is] four and a half per cent, its four and a half per cent, so that we don't have to wait on the central bank to be pruning the rates and hope that one day, the commercial banks will tell you that you can get 6.9 per cent [interest rate] to purchase a motor car and 6.9 per cent [interest rate] to go into small business,” Reid continued.

Small and medium-sized tourism enterprises (SMTE) loan refers to the loan scheme, through financing from the Tourism Enhancement Fund, which enables industry stakeholders to access between $5 million and $25 million to upgrade and improve their operations, at five per cent interest for five years.

“We're on a growth trajectory now, in addition to that, if we are going to produce as we are expected to and at the level that the prime minister is expecting us to, and that he is requiring of the productive sector, then it means therefore, that EXIM has to be almost a part of the fulcrum of all that is likely to happen on the production side, by providing financing at affordable rates,” Reid told to The Jamaica Observer.

“The third thing on [the] wish list is what I call the offshoot of the SMTE line; the template is there for other government ministries, including our parent ministry to [mimic the SMTE line] and give us that pool of funds to focus it directly into the productive sectors of the economy,” the director said.

Reid's fourth objective is to pursue import substitutions for agro-processing.

“There is this presumption that because we're the EXIM bank, the entities coming to us should be foreign exchange-earners, but if we're able to put in a line for imports substitutions, it means that we will be spending less in terms of outflows to bring in imports,” he said.

Reid told The Jamaica Observer that over the next 12 months, EXIM expects to see these strategic objectives implemented.


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