PRESIDENT of the Jamaica Manufacturers' Association (JMA) Omar Azan has urged local commercial banks to place emphasis on loans for the manufacturing sector, rather than the consumer loans they now push.

"It puzzles me that the lending practices of our banks are skewed to individuals for consumption loans and not business loans," Azan said. "This calls for a review of our banking legislation and regulations as currently they do not foster the growth of businesses," added the JMA president.

Azan was speaking at Wednesday's annual general meeting of the JMA at the organisation's head office in downtown Kingston.

According to Azan, the collateral requirements required by banks and other financial institutions seeking loans for production continue to be out of reach for small and medium-sized enterprises.

But despite knocking commercial banks for their 'skewed' loan policy, Azan said that the JMA had lobbied for and was successful in securing special financial packages for manufacturers.

"This materialised in April of this year when First Global Bank provided support in the form of international trade finance opportunities with raw material and equipment financing, solely for members of the association," he said.

"This unique loan facility is available at a special variable interest rate of 7.9 per cent per annum for one year," he told the meeting.

He added that members had the option of paying up to three years for equipment financing at a rate of 8.95 per cent.
"We will continue on our quest to secure other financial windows and lobby for lower interest rates," said the JMA president.

In the meantime, Azan praised the accomplishments of his administration citing Government's relaxation of the Customs User Fee (CUF), saying that the JMA has continually lobbied for the removal of the two per cent charge on the importation on raw material.

"Minister of Finance Audley Shaw, in the 2008/09 budget presentation, announced that manufacturers will be able to claim the CUF as tax credit for capital goods, as of July 1," said Azan.

"This is for us, the first step in the phasing out of the CUF. We are still working towards the removal of the CUF on raw materials," he added.

Azan said that the JMA had also received support from the Canadian Corporation Fund (CCF) to conduct a 'hidden cost' study of the number of charges levied by Government agencies and other institutions on the manufacturing sector.

"This will provide a guide for the association to lobby for the removal or reduction of charges, especially where duplications exist as well as to enlighten investors on the costs involved in operating a manufacturing business," he said.

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