EXIM Bank considers loan intervention programmes for SMEsFriday, April 10, 2020
Managing director of the National Export-Import (EXIM) Bank of Jamaica says loan intervention programmes to assist small- and medium-sized enterprises (SME) in the productive sector with operational stresses caused by the novel coronavirus disease (COVID-19) outbreak are currently being considered and await approval from the Ministry of Industry, Commerce, Agriculture and Fisheries and the Ministry of Finance.
“Being a development bank, we're very cognisant of the impact on our clients and now that [COVID-19] has hit, we have been negotiating with our parent ministry to try and put in programmes based on best practice. We been looking at the US and several other countries' economic stimulus packages to see what we can do from our development arena,” Bell told the Jamaica Observer in an interview.
According to her, the bank has been deluged with requests from clients whose businesses have seen a downturn in activities.
“Largely speaking we're anticipating that there is going to be a severe impact on the economy in the short term but that's not rocket science. We're going to see severe disruptions in the ability of clients to service their loans, which is why we're very adamant that like other countries, soft loan programmes need to be put in place,” she asserted.
“We're hopeful that it will get approved so that we can offer the relief, because the productive sector is asking for a lot of waiving [of fees], but we're not yet in a position to be able to give them.”
She added that the disruption in clients' export-import activities resulted in their inability to meet their financial commitment. However, clients who are chemical manufacturers saw upticks in business and have requested new loans in order to meet demands.
In the interim, EXIM Bank in conjunction with the Ministry of Finance under the small and medium tourism enterprises (SMTE) loan programme, have suspended the principal and interest payments for 90 days and extended loan tenures on medium-term loans of five to seven years, to SMTEs.
“I think it is a good start, the situation is very fluid. But we're hoping that it gives some breathing space so that we can keep these companies operational so that they can start the recovery process a lot quicker. We're able to do it for the tourism and its linkage sectors, and we're considering it for the rest of the productive sector,” Bell stated.
Bell further added that she endorses any collaborations with stakeholders, institutions, and business associations in support of assisting SMEs during this time.
“I think if we work together we will find the solutions and we need to be proactive about it. I am very worried about the impact on the economy, in particularly as it relates to unemployment. The SMES provide the majority of the employment in the country and if we don't keep them strong we're going to have much bigger problems later on.”
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