By Dennise Williams, Staff Reporter
Bernadette Barrow, manager of the Small & Medium Enterprises Retail Banking Division of the NCB, is congratulated by Michael Lee Chin, chairman of NCB, at the launch of NCB-SME held at the Hilton Hotel. - Winston Sill/ Staff Photographer
THE NATIONAL Commercial Bank (NCB) is taking on the small and medium business sector of Jamaica.
In conjunction with the launch of their Small and Medium Enterprises (NCB-SME) division, a department of business relationship managers dedicated to entrepreneurs, NCB is rolling out its NCB Business Grow Loan Fund. "We believe that poor people with good ideas and sound management become wealthy. And we are going to look for them. We also know that rich people with bad management become poor people, and we want to avoid them," stated Aubyn Hill, managing director of NCB at the NCB-SME launch on July 20 at the Hilton Hotel.
Seeking to be the bank of choice for entrepreneurs, NCB has sourced funds from the European Bank and the Jamaican Development Bank and in turn will be offering special loan packages. Mr. Hill explained the two loan packages to the Financial Gleaner. "We have a US$6
million loan fund which offers an eight-year repayment and 10 per cent fixed interest rate for the life of the loan. Our $350 million Jamaican dollar loan fund will attract interest rate at base rate, but this interest rate will not be fixed over the 8 year life of the loan."
Currently, NCB's base rate is 20.25 per cent. And what about collateral? Mr. Hill declares, "We are catering to small businesses and we will tailor the collateral to the particular business plan. In fact, maybe the idea could be the collateral." To sweeten the deal, NCB is waiving the commitment fees for loans processed before October 1, 2004. Additionally, unlike their competition, there are no minimum loan requirements. States Mr. Hill, "What entrepreneurs don't need is a whole string of conditionalities to get a loan. NCB is not about that. NCB wants to make rags to riches stories."
In terms of what NCB-SME is about, the department, headed by Bernadette Barrow, will offer services including business planning, capital expansion, marketing, human resources management and accounting. As a part of the programme, NCB-SME, using the power of Internet banking, will be offering several packages.
NCB BUSINESS PREMIUM PLAN
This plan provides an integrated banking package and requires that a monthly minimum balance of $200,000 be maintained. A business current account with special features; liquidity, cash management and investment services; and Corporate Credit Cards are available in this package.
NCB START-UP PACKAGE
NCB will waive the monthly service charge for three months with no minimum balance
requirement. There will be free unlimited online banking for enquires, electronic statement files and download of account information. Additionally, NCB will offer, free of cost, their Sweep facility. The facility will link all current and savings accounts and use all the available balances in those accounts to create a pool of funds that you can access at any time, from anywhere. THE CLUBS AND
CHARITIES ACCOUNTS
This account offers registered non-profit organisations, including clubs, churches, societies and
charities favourable terms and facilities, including free banking with no service charge.
NCB E-FEE FOR SCHOOLS
This package of products and services to schools that maintain a monthly minimum credit balance of J$1 million. In exchange, NCB-SME will provide services such as free point of sale terminals and full waiver of merchant fees for payments made from terminals.
BUSINESS E-LINK
Customers can access their accounts and conduct transactions night and day. They can monitor cash flow, move funds around quickly outside normal banking hours and make direct salary payments which will save on the cost of preparing cheques and giving staff time off to visit the bank.
In regards to their target market, NCB-SME defines small businesses as those with an annual sales turnover of between $5 million to $50 million and borrowings up to $3 million. Medium businesses are those with a turnover of $50 million to $250 million, with borrowings between $3 million and $20 million. Levels of employment among SMEs will range from 10 to 50 individuals. In the NCB-SME model, the SME group generally comprises self-employed professionals, sole proprietors, partnerships, service entities and businesses.
Based on NCB's research, there are approximately 25,420 small and medium sized businesses in Jamaica. These contributed approximately $22 billion dollars in sales in 2002 and represented 50 per cent of entities that submitted General Consumption Tax returns.
Courtney Campbell, senior acting general manager of retail banking at NCB, states, "NCB serves approximately 6,000 customers in the small to medium enterprise segment. It is anticipated that NCB SME will deepen the relationship with existing SME customers, estimated at 22 per cent of the market, and attract new ones with specially designed banking packages."
