NCB reaches out to SMEs in partnership with USAID


NCB reaches out to SMEs in partnership with USAID

Observer writer

Wednesday, February 19, 2020

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National Commercial Bank's (NCB) assistant general manager, Corporate, Commercial and Consumer Banking Division, Stuart Reid says the bank is hoping to reach out to small entrepreneurs and businesses who are in need of help to grow their business.

“We hope that through continued dialogue and sessions that the word will get out. There will also be, in support of this, continued promotion in terms of the advertising space which will speak to these things and speak to the facilities that we are offering,” stated Reid. He then added: “We are hoping that through these sessions and those promotions that the word will spread.”

Reid was responding to a question during an NCB Small and Medium-Sized Enterprises (SMEs) Breakfast & Finance event held at S Hotel in Montego Bay recently.

The breakfast and finance event was aimed at providing SMEs in western Jamaica with information about a special loan facility created in collaboration with United States Agency for International Development (USAID) and Development Bank of Jamaica (DBJ).

Loan financing remains with NCB while the DBJ and USAID are the loan guarantorss and the Credit Enhancement Facility (CEF).

A CEF is an agreement in which a financial institution makes a promise to repay a loan if the borrower defaults.

As part of its support with the USAID in the first instance, NCB has set aside US$25 million, while $3 billion annually has been committed for the partnership with DBJ.

Under the arrangement with the USAID, the maximum guarantee arrangement is US$2.5 million, In order for a business to qualify, it must have no more than 250 employees with gross annual sales of up to US$20 million.

DBJ Project Manager Tracy-Ann McIntosh said NCB is one of the first movers of the new, revamped CEF which was relaunched in November of 2019.

McIntosh said attempts are being made to plug all the gaps and strengthen partnerships with all stakeholders so that, “you, the SME client, will benefit”.

“We are strengthening our partnerships, we are allowing increased discretion in the financial institution, we are introducing new technology and, therefore, we expect to see more people coming out to request support. We want to see the increase volumes [and] faster turnaround,” stated McIntosh.

“We believe that all these upgrades are quite timely because the economy is poised for an upgrade at this time and we are definitely on an upward projection,” suggested McIntosh, who added “so it is important for not just financial institutions to stand ready. NCB is now here today telling you that they are ready. They are not just improving international execution and functionality, they are also strengthening partnerships so that you the client can benefit more and will have more options open for you. So whether you are small, medium or large, what is important now is for you as small business people to be also ready—because the financial solutions are here and are waiting on you to tap into those resources.”

USAID country representative to Jamaica, Jason Fraser said apart from USAID's current focus on SMEs, renewable energy and energy efficiency — which are important for the development of Jamaica and the wider Caribbean — the partnership will help businesses grow.

“We do think that there is an opportunity for us to partner together with Jamaica, partner with the region, and partner with small and medium enterprises to help them grow. So, this partnership will also help small businesses access financing at commercially favourable turns for working capital, machinery, equipment, facilities and business growth expansion, and other investments. It will also help Jamaican companies expand by boosting jobs and sales,” stated Fraser.

NCB senior general manager, Corporate Commercial & Consumer Banking Division, Brian Boothe noted that while the debate continues over the adequacy of collateral for debt financing, the bank admits there is space for both the banker and client to achieve their mutual goal.

In this regard, Boothe said the loan guarantee solution offered thought DBJ and USAID will provide vital support to the bank's SMEs financial packages.

The range and scale of business activities supported by these loan guarantee solutions cover a wide spectrum of business development goals and projects to include alternative energy solutions, machinery and equipment acquisition, capacity expansion, retooling and irrigation projects.

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