By Omar Anderson, Gleaner WriterTAX-COMPLIANT MEMBERS of the Jamaica Exporters' Association (JEA) can now access loans of up to $18 million (US$300,000) at a seven per cent interest rate, through the Export-Import (EX-IM) Bank.
Finance and Planning Minister Dr. Omar Davies, in opening the 2004/2005 Budget Debate at Gordon House yesterday, said the EX-IM Bank will be lending US$8.4 million (J$504 million) to exporters who have four years to repay, including a one-year moratorium on the loan.
According to the Minister, the loan ceiling for each borrower is US$300,000, and the JEA is to jointly administer the loan facility.
"The loans will be made to companies approved by the JEA, assessed as being capable of reaching agreed targets for exports, job creation, and investment," Dr. Davies told the House of Representatives.
"Loans will only be provided to companies that are in good standing in terms of tax payments."
TAX-COMPLIANT
Contacted yesterday, JEA President Dr. André Gordon told The Gleaner that some 90 to 95 per cent of the JEA's 220 membership should be able to access the loan because they are tax-compliant.
"Our member companies that currently access financing programmes with the assistance of the JEA, already know as a base requirement, that they must be tax-compliant," he said.
He noted that the JEA currently partners with three lending agencies to provide financing for its members.
These, he said, were the Government of Jamaica/Government of the Nether-lands non-collateral lending programme, the USAID-funded Export Finance programme that provides small exporters with working capital, and the EX-IM Bank that provides JEA exporters with a $2 million loan to be used as working capital, and to buy raw material and equipment.
"We've been doing these things for some time, but we've been quiet about it," Dr. Gordon said.
He added that the other loan-accessing criteria Dr. Davies announced yesterday had already been discussed with prospective borrowers.
EXPANSIONIST MODE
"These export companies that need to borrow are in an expansionist mode and want to finance that expansion at rates which will reduce the risk of their investment and make the overall project more attractive for them, as well as for the country," Dr. Gordon said.
Meanwhile, commenting on the news, exporter and former JEA President Beverley Lopez told The Gleaner that the proposed EX-IM Bank loan is welcomed at this time.
"Any line of credit available at single-digit interest rates is an attractive idea," she said.
