Ashford W. Meikle, Staff Reporter
CUTHBERT
NEARLY THREE months after Prime Minister Portia Simpson Miller announced her plan to use $1 billion from the National Insurance Fund (NIF) to help finance the country's struggling micro and small businesses, the labour and social security ministry - the government department overseeing the programme - is yet to disburse the cash to the institutions that will directly manage the loans.
"We haven't received [the money] yet and I can't say when we will get the funds," Valdalee Spence, the general manager of the National Development Foundation of Jamaica (NDFJ), one of the participating agencies, told the Financial Gleaner on Wednesday.
"I think they are still trying to work out the logistics," added Spence. "Remember, you have an interest rate factor to deal with and I suspect they are trying to determine where to draw the middle ground given that it is one's pension that is being invested."
Simpson Miller controversially announced the decision to dip into the NIF, which manages the contributions to the national pension scheme during her budget presentation in May, saying that the move would help to kick-start the small business sector, creating jobs and generating growth.
The government would borrow the NIF money at eight per cent, but it was not announced at what rate the money would be on-lent to small and micro business borrowers.
Officials had suggested that allocating the money was a matter of priority for the populist Simpson Miller, who has made an attack on poverty a central part of her policy since becoming Prime Minister in March. Moreover, with a general election likely to be called soon, both government supporters and critics say that the administration has an interest in getting the cash out as early as possible.
But, with borrowers beginning to queue for the cash, the lending agencies are not yet in a position to meet the pent-up demand.
"We have submitted our proposal and are awaiting response," said Brenda Cuthbert of the City of Kingston (COK) credit union, another of the institutions earmarked for on-lending the cash.
Simpson Miller's announcement of the proposed scheme initially drove expectations.
"People started calling a lot when it was first announced but we had to tell that we É haven't received any money yet," said the NDFJ's Spence. "It sort of died down."
On Wednesday, Floyd Morris, the junior labour minister, could not say when the details on how the scheme would operate would be in place, indicating that specific information would have to await the return to the island of his boss, Derrick Kellier.
"We haven't finalised all the details yet," Morris told the Financial Gleaner. "I can't go into any details about that right now because the permanent secretary and Minister Kellier are off the island. The Minister has pointed out certain things for cabinet discussion but we are just making sure that all the monies are invested [properly]."
While some agencies and potential borrowers have criticised the apparently slow pace at which the government has been putting the scheme together, Morris defended the administration, saying that it wants to ensure that whatever was done would be feasible.
"We have to make sure that the mechanism to ensure that the projects that will be funded are very much É viable. This is why we are doing our internal sorting out so that we can get things rolling. What will happen is that people will apply to [the institutions] which will send the necessary documentation for the project to the (labour) ministry so that we can release the funds."
