Left: Milverton Reynolds, managing director of Development Bank of Jamaica. Right: Bill Clarke, president of Scotiabank Jamaica. - File photos

Loans at concessionary rates, ranging from 7.875 per cent to eight per cent interest, are now available to small farmers and small hoteliers, says the Development Bank of Jamaica (DBJ).

The loans are being financed by Bank of Nova Scotia Limited, which has advanced $600 million to DBJ to support Government's programme of assistance for the smaller players in tourism and agriculture sectors.

"The line of credit became available this week when the final documents were signed between the two organisations and the Ministry of Finance," said DBJ.

Quarrel

The loan distribution was held up last year as the two agencies quarrelled over the narrow spread that BNS was insisting DBJ should take for administering the funds. The issue was settled after the Ministry of Finance stepped in, offering to subsidise the cost of administration.

Under the agreement between the two banks, DBJ is allowed to charge an administrative fee of not more than 0.125 per cent per annum for each approved loan to the agriculture sector and not exceeding one per cent for each approved loan to the tourism sector.

Known as the Scotiabank Jamaica Loan Fund, $250 million will be allocated to the agriculture sector allowing small farmers to access loans through the national People's Cooperative Banks at 7.875 per cent; while small hotel operators will be able to borrow $350 million, which will be made available through BNS at an interest rate of eight per cent.

For the purposes of the loan, "small hotel operators" are described as owners or operators of a hotel or guest house with no more than 100 but not less than 10 rooms and with under 150 employees, said DBJ.

Farmers can access loans of $250,000 to $5 million, while hoteliers can apply for $2 to $15 million of financing.

Borrowers will have a maximum of seven years to repay their loans, with a moratorium not more than six months on the principal.

"The importance of these sectors to the national economy cannot be overstated, in terms of employment, foreign exchange earnings and the ability to feed ourselves," said DBJ Managing Director Milverton Reynolds, quoted in a company release.

"It goes without saying that the Development Bank of Jamaica will do everything it can to assist the productive sectors to expand and develop its potential."

Said BNS President Bill Clarke: "Scotiabank has always shown an unconditional commitment to the development of this country. Over the years, we have implemented special loan facilities at concessionary rates to the productive sector with the objective of assisting with Jamaica's economic development. This facility and partnership with the DBJ further highlight that commitment."

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