EXIM Bank and JMMB partner on Export GuaranteeFriday, June 04, 2021
Up to 30 small and medium enterprises (SMEs) seeking funding to export are being targeted for support through EXIM Bank's new Export Guarantee product. Under the initiative, the bank will guarantee up to 80 per cent of loans being taken out by SMEs at Jamaica Money Market Brokers (JMMB).
Speaking on #MoneyMovesJa with Kalilah Reynolds recently, business development consultant at EXIM Bank, Winston Lawson, said the new product supports the bank's role in national development and targets exporters along with others in the value chain including their suppliers.
He said as a national bank, the institution feels obligated to ensure that SMEs are able to do seamless exports with consistent funding for their operations.
“What we have sought to do is put a financial solution together that facilitates or mobilises finance to those SMEs who require that access to finance as they may come up a little short on their collateral or security to support the funding that they may need,” said Lawson.
A total of $150 million has been set aside for the programme in the first instance, with EXIM to guarantee between $5 million and $10 million of any client's loan.
That means 30 SMEs could be supported at the minimum end of the spectrum and 15 at maximum. However, to be eligible they must have total annual revenues between $15 million and $425 million.
According to Lawson, EXIM expects SMEs to approach JMMB for the product as well as to refer its own clients to JMMB to take advantage of the solution.
“JMMB would do their typical assessment and where the clients qualify they will utilise the export guarantee. It may happen that the SME may only have security that covers $2 million of $10 million. That's fine, we can have a deal, because what the export guarantee allows JMMB to do is to use $8 million of the export guarantee to support the $10-million loan that would be given to the SME,” explained Lawson.
Lawson added that the guarantee would last for a year and cover working capital for the short term.
“Our focus is on the short term for exporters to facilitate issues of acquiring raw materials to allow them to convert and expand on their exports,” said Lawson, adding, “It's a critical and relevant solution which reaches to a market that is relevant.”
Meanwhile, Lawson said EXIM intends to review the metrics of the programme in the near term in order to enhance the offerings to other cohorts.
He has also commended both financial institutions on the partnership which he said should translate to more success within the SME sector to benefit the overall economy.
The Export Guarantee programme was launched on Wednesday, June 1.
Catch new episodes of #MoneyMovesJa with Kalilah Reynolds on Wednesdays at 7pm on YouTube and kalilahreynolds.com
Now you can read the Jamaica Observer ePaper anytime, anywhere. The Jamaica Observer ePaper is available to you at home or at work, and is the same edition as the printed copy available at https://bit.ly/epaper-login