Business

NIF grows by 17 per cent to $95.4 billion

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Sunday, June 18, 2017

Print this page Email A Friend!


At the end of March 2017, the National Insurance Fund (NIF) portfolio had reached a value of $95.44 billion, representing an increase of approximately $13.7 billion or 17 per cent over the previous financial year.

Minister of Labour and Social Security (MLSS), Shahine Robinson, told Parliament earlier this year that the growth was the fastest in the history of the Fund. However, she cautioned that an imbalance still remains between NIS contributions received and benefits paid.

In terms of revenue, the Ministry said that some of the factors contributing to the increased value were: total interest income of approximately $4.29 billion; dividend of $668 million; and rental income of $253 million.

Contributions (net of National Health Fund allocations) amounted to $15.2 billion.

But, total payment for pension benefits for 2016/17 stood at $15.85 billion, which was some $650 million below the net contributions.

These figures were made available by the MLSS recently to the Public Administration and Appropriations Committee (PAAC) during two weeks of review by the parliamentary select committee, which ended last Wednesday.

However, despite the concerns, since 2006, the NIF has been mandated to implement a loan programme for job creation, entrepreneurial and economic growth via small and medium-sized enterprises (SME) business development.

The Fund originally allocated $1 billion for this purpose, hence the facility was designed for SMEs called the NIF/SME Credit Facility. The initiative provided loans to approved Participating Financial Institutions (PFIs) at an interest rate of four per cent on the reducing balance.

These PFIs are required to on-lend to small and medium enterprises, at interest rates not exceeding ten per cent on the reducing balance.

The ministry says that for the upcoming period, the NIF will seek to achieve several goals, including ensuring registration/contribution of participating SMEs under the NIS; increasing the pool of NIS contributions resulting from the formalisation of a large number of SMEs into the formal business sector; job creation throughout the nation, thereby reducing rural/urban migration and increasing job opportunities for those skilled and talented citizens in various parishes and communities.

The ministry says that the NIF is carrying out redevelopment works for selected parish offices across the island in a bid to ensure improved servicing environments for both its employees and pensioners.

Through a prudent diversification strategy, the NIF's major investments are in the tourism, manufacturing, banking & finance as well as the real estate sectors.

One of the most recent investments was the refurbishment of the Braco property, which has now been completed, and the 232-room hotel located in Trelawny is now in full operation.

Robinson said that, owing to the success of the programme, the NIF, through the approved Participating Financial Institutions, will increase the amount to on-lend to the small business sector from $1.5 billion to $3 billion.

She said that it is generally agreed that the SMEs have enormous potential for impacting the economy through employment and income generation.

ADVERTISEMENT




POST A COMMENT

HOUSE RULES

1. We welcome reader comments on the top stories of the day. Some comments may be republished on the website or in the newspaper � email addresses will not be published.

2. Please understand that comments are moderated and it is not always possible to publish all that have been submitted. We will, however, try to publish comments that are representative of all received.

3. We ask that comments are civil and free of libellous or hateful material. Also please stick to the topic under discussion.

4. Please do not write in block capitals since this makes your comment hard to read.

5. Please don't use the comments to advertise. However, our advertising department can be more than accommodating if emailed: advertising@jamaicaobserver.com.

6. If readers wish to report offensive comments, suggest a correction or share a story then please email: community@jamaicaobserver.com.

7. Lastly, read our Terms and Conditions and Privacy Policy



comments powered by Disqus
ADVERTISEMENT

Poll

ADVERTISEMENT
ADVERTISEMENT

Today's Cartoon

Click image to view full size editorial cartoon
ADVERTISEMENT