Dionne Rose, Staff Reporter

There is no apparent eagerness on the part of small businesses to access funding from the billion-dollar loan scheme being offered by the Government through a drawdown from the National Insurance Fund (NIF).

Last year, Prime Minister Portia Simpson Miller announced that $1 billion would be made available through the NIF to assist small companies with capital.

But checks made by The Gleaner with participating financial institutions, which are disbursing the funds, indicate that not many persons are capitalising on the opportunity.

At least two participating financial institutions told The Gleaner that the scheme has been "slow" in taking off.

According to Pamela McLean, head of the National Export-Import Bank of Jamaica (Ex-Im Bank), the institution had only used up $5 million of its first tranche, approving only four applicants. She, however, noted that another $15 million was in the process of being approved.

A misconception

She attributed the slowness to a misconception as to the requirements for the scheme.

"There was a mistaken view from the intended borrowers that it was an unsecured loan or little security," she told The Gleaner.

She noted, however, that the Ex-Im Bank was charged with the responsibility of managing the loans.

As such, she said, prospective borrowers are required to meet the following requirements: businesses must be registered to trade and be tax compliant; borrowers are required to have a tax-registration number (TRN) and a valid tax compliance certificate (TCC). The TCC is, however, waived for those who are borrowing $2 millionor less.

Vivian Chin, managing director of the Micro Investment Development Agency (MIDA), also reported similar challenges in disbursing the loan.

"The biggest drawback is the bureaucracy," he said.

He pointed to the need for applicants to be registered by the Registrar of Companies as a deterrent.

"A lot of them (applicants) see it as cracking the door for the tax man," he said.

But while the other institutions are reporting an indifferent response to the loan scheme, the Development Bank of Jamaica (DBJ) has been getting a great number of applications.

Byron McDonald, general manager of credit operation at the islandwide institution said the scheme was "undoubtedly" doing well.

He said to date, the DBJ has approved loans valuing $120 million with another $50 million being processed.

He said that People's Cooperative (PC) bank managers are trained to help prospective borrowers put together a business plan, and that the institution was more flexible on the requirement of collateral.

President of the Small Businesses Association of Jamaica, Oswald Smith, said his members have been complaining about difficulties in accessing the scheme.

"I think most of them would like the terms and conditions to be much easier," he explained.

dionne.rose@gleanerjm.com