The Jamaica Manufacturers and Exporters Association (JMEA) in a statement issued on Thursday last (September 12) says the organisation notes with great interest the further reduction in the Bank of Jamaica (BOJ) policy interest rate to 0.5 per cent , which follows a series of rate reductions since June 2017.

The Richard Pandohie-led JMEA made reference in its first major public statement for this year to a quote by the new Governor of the Bank of Jamaica Richard Byles stating that that he hopes that this (policy rate reduction) will “…create a faster pace growth on economic activity…”

The JMEA release offered that a key component in the desired growth for the country will be credit extended by financial institutions to the productive sector, particularly the small and medium enterprises (SMEs).

“Despite the many signals by the Government and banks as well as their attempts at moral suasion to have expansion of credit and lowering of the lending rates to SMEs, all the talks have translated to very little tangible actions, as SMEs are still accessing credit at rates of up to 22 per cent.

“Furthermore, the value of private credit extended to SMEs dropped to 10.7 per cent of the total value of funds available to private sector lending.

“It is time that we have realistic expectations,” the release from the manufacturing and export grouping stated.

Further, the JMEA release said that the banks are private institutions that are going to run their business to maximise profits. They are not in the business of ensuring development of a sector, even though we believe it is mutually beneficial for them to engage and help the SMEs of today to grow into the big businesses of tomorrow.

“The Government must take the lead in creating more avenues for development financing to the productive sectors of our economy in order to unlock the desired growth.

“The Development Bank of Jamaica (DBJ) has removed itself from direct lending and the model of lending money through approved financial institutions has not worked to drive a lowering of rates for the productive sector or greater access to capital needed at the levels to stimulate rapid economic growth.

“Our only direct lending development financial institution, the EXIM Bank, seems constrained to lend at fairly high rates in many cases, exceeding the private banks. When announcements are made for low interest rate facilities through the EXIM Bank, these facilities take an extended time to materialise, they are sometimes unsustainable, and cherry picked for specific sectors. So essentially, Government has taken itself out of the equation for development of the entire productive sector.

“Since financial institutions have clearly demonstrated that the country’s development risk is not theirs to take, then the question remains; when will the Government step up, take the lead and risk to unlock growth from the largest base of the Jamaican economy?

“Manufacturers and exporters are ready and willing to play our part in growing our economy. Bring us into the equation. Time is of the essence,” the JMEA communication ended.