Manufacturing in Jamaica > Financing

The Jamaica Manufacturers’ Association Limited (JMA) has always been at the forefront, lobbying for initiatives that will benefit its member companies. One such initiative is the lowering of interest rates on loans.

Scotiabank

The Jamaica Manufacturers’ Association is continuously working to secure single digit financing for manufacturers, particularly at this time when we are working towards experiencing growth. Scotiabank answered the call in October 2009 with a J$500 million Productive Sector Growth Fund. This loan facility will be made available at an interest rate of 9.95% for: 

·         Acquisition of new capital for business use

·         Reengineering of production processes

·         Retooling of business facilities

·         Modernization of technology

·         Medium term working capital needs  

The Fund is divided into two (2) parts: 

·         J$75 million to start-ups (businesses with an operating history of two (2) years or less)

·         J$425 million to businesses wanting to expand and improve production  

For clients with revenues above $250 million contact:

Ms. Denise Coubry

Senior Relationship Manager

Corporate and Commercial Banking Centre

Telephone: 932-0298 

For clients with revenues below $250 million contact:

Mr. Asquith BrownProduct and Portfolio Manager – SME

Telephone: 932-0390 

General contact:

Mr. Wayne P. Hewitt

Senior Vice PresidentCorporate and Commercial Banking

Telephone: 932-0272

Email: wayne.hewitt@scotiabank.com 

Existing customers of Scotiabank may also opt to contact the branch with which they maintain accounts.  

National Commercial Bank

The National Commercial Bank (NCB) provided affordable financing in the form of a J$1 billion loan facility at an interest rate of 9% per annum. Businesses should be able to access as much as $15 million by November 1, 2009 with seven years to repay.  Disbursements will be made in Jamaican currency.   

Contact: Bernadette Barrow (Mrs.)

Assistant General Manager, Small & Medium Enterprises

Retail Banking Division

National Commercial Bank Jamaica Limited

Telephone (876) 935-2065

Email: barrowbd@jncb.com  

See table below for details on NCB's lending facility: 

New Product Name	NCB Nation Builder Credit Line for SMEs
Application Period	November 1, 2009 to April 30, 2010
Total Amount Available	JMD1B
Facility Type	Fixed Amortized Loan
Currency	JMD
Eligibility	·        Registered SMEs (i.e entities with annual credit   turnover of less than JMD500M)·        Registered SMEs that employ 50 or less persons
Loan Purposes	Business expansion initiatives; Capital expenditure excluding real estate purchase; Working Capital support. This facility is NOT to be used to refinance existing or external debts.
Individual Loan Amounts	Minimum:JMD500,000Maximum: JMD15,000,000
Debt/Equity Ratio	Maximum ratio:75:25  Individual loan amounts must not exceed 75% of total project cost
Tenure Moratorium Period	Maximum 7 years, inclusive of moratorium period.A maximum of up to 12 months, if warranted, on principal payments only.
Interest Rate	Fixed Rate of 9% (APR)
Commitment Fee	2.33% plus GCT
Processing Fee	0.50% of the loan amount, inclusive of GCT, minimum $3, 000.
Collateral	In line with existing credit policy
Lending Criteria	Successful applicants must satisfy existing credit risk policies and credit scoring criteria.
Availability Period	Successful applicants MUST avail of facility within 3 months from the date of acceptance of the facility.
Disbursement	Single or partial disbursements are allowed.
Conditions	All projects being financed MUST be directly related to the business.
Special Conditions	·        25% of the pool of funds will be allocated to new businesses in existence for 2 years or less.·        25% of the pool of funds will be allocated to women in business (owned and operated by a woman)·        The remaining 50% of the pool of funds will be allocated to established businesses operating for more than 2 years in the agricultural and manufacturing sectors·        NCB MUST be the borrower’s primary bank

EXIM Bank USD18M IDB Line of Credit

As the world’s most powerful industrial nations try to halt the global economic contraction, Jamaica’s EXIM Bank is targeting the use of its Inter-American Development Bank (IDB) Line of credit to ensure that Jamaican businesses that rely heavily on foreign currency are able to continue production.

The US$18 million currently available was approved late last year by the IDB with the support of the Ministry of Finance and the Public Sector for on-lending to the productive sector.  

Companies in the Jamaican productive sector that export directly or earn foreign exchange are able to access this line of credit where the interest charges are calculated on the reducing balance and are tied to the six month LIBOR rate – which means interest rates may vary after the initial six-month period, but are expected to range between 10 – 11 per cent per annum.

EXIM Bank Jamaica assists potential borrowers to manage their foreign exchange exposure by ensuring that hard currency funds are lent only to those businesses that earn hard currency.  As such, loans will be disbursed in United States dollars (USD) and borrowers must prepare to repay the loan, in full in USD only.

As is now the norm with Jamaica’s EXIM bank, commitment and processing fees, will also apply.  Import restrictions connected to this line of credit require that suppliers be from member countries of the Inter-American Development Bank.  A list of IDB member countries is shown below.   Loan applications can be made via our website, or in our offices located on the ground floor of The Dorchester Building, 11 Oxford Road, Kingston 5, Jamaica.

Eligibility Criteria

§  Businesses should be majority Jamaican owned; specifically Jamaican Nationals should own at least 66 2/3 % of the equity.  

 §  Borrowers must be in compliance with applicable environmental laws, and have the necessary environmental permits to operate. 

§  Loan applications from companies operating in the sectors and subsectors listed below, must be accompanied by evidence of approval by Jamaica's environmental impact agency; and/or copies of the environmental licenses, permits for carrying out the respective activities:

 § Energy generation: Hydo-electric, thermal or nuclear§ Management or disposal of solid waste§ Mining and materials extraction

§ Metals processing

§ Leather processing

§ Production, storage or transport of chemical products including fertilisers and pesticides

§ Charcoal production

§ Irrigation and dams

§ Construction of tourism infrastructure and recreational facilities§ All goods and services financed shall be purchased from IDB member countries

EXIM Bank $10M Credit Facility

The Jamaica Manufacturers’ Association (JMA) Ltd. is continuously working to secure special financial windows at low interest rates for manufacturers, especially in light of the current global economic situation. The JMA facilitated the link between the Sovereign Bank in the United States (US) and the Export Import (EXIM) Bank of Jamaica, which paid off in the form of a US$10 million credit facility, which is available to assist manufacturers in importing raw materials and other productive inputs (no consumer goods) of US origin (at least 51% US national content).  

Access to the fund will be through Letters of Credit only and the interest rate is 6 months LIBOR plus 1.25% and this will be set at the date of disbursement. EXIM’s service charge will also apply and a credit period of 180 days is allowed. Disbursements are repayable in full at the end of the credit period and the importer is required to provide security for all disbursements. 

For further information contact EXIM Bank’s Trade Financing and Risk Management Division.

National People's Co-operative Bank

The National People’s Co-operative Bank (NPCB) is now offering loans with interest rates as low as 7.875% per annum on the reducing balance with up to seven (7) years for repayment to the manufacturing and services sector. This financing is available for Small and Medium-sized Enterprises (SMEs).

The NPCB will finance 70% of each project with the proposer providing 30% equity. For loans equivalent to US$5000 and under, the NPCB will finance 80% and the equity to be provided is 20%.

For more information call the Mandeville Head Office at 961-0278 or locations at:  Mavis Bank – 977-8010; Red Hills – 945-8388 and Stony Hill – 942-3769.

Development Bank of Jamaica

1.     SME Line of Credit 

The Development Bank of Jamaica (DBJ) has committed $1 billion to the Small and Medium-sized Enterprise (SME) Development Line of Credit to provide support for projects identified as commercially viable. This will be on-lent through Approved Financial Institutions (AFIs), such as commercial banks including the National People’s Cooperative Bank (NPCB), credit unions and micro-financing institutions.  The funds will be available to producers of goods and services established and operating in Jamaica, and a maximum of $15 million disbursed per entity or group at a 10% fixed interest rate. Eligible SMEs will get up to seven (7) years to repay.  

2.    Energy Line of Credit DBJ Petrocaribe SME Energy Fund 

The DBJ has committed $1 billion to the SME Energy Line of Credit, which will be on-lent through Approved Financial Institutions (AFIs), such as commercial banks, merchant banks, the National People’s Cooperative Bank (NPCB), credit unions and micro-financing institutions. Eligible enterprises include: commercial institutions (SME business users), large commercial and industrial users, commercial businesses requiring energy audits, Energy Service Companies (ESCos) and manufacturers of energy efficiency equipment and devices.  The funds will be provided for retrofitting of small, medium and large enterprises to accommodate energy conservation and alternative energy sources, with specific emphasis on electricity conservation and solar energy via photovoltaic energy, etc. A maximum of $5 million per entity will be disbursed at 10% interest. 

 

 

International Trade Financing 

First Global Bank

First Global Bank, has provided a special offer solely for members of the Association in the form of international trade finance opportunities with raw material and equipment financing.

Members are now able to apply for a minimum approved credit of US$200,000 (J$14 million), which will afford them access to a unique loan facility at a special variable interest rate of 7.95% per annum for one year. Members also have the option of paying up to 3 years for equipment financing at a rate of 8.95% yearly. Foreign Currency hedging is also available.

For further information, please contact Michael Willacy or Paula Barclay at 908-2327.

National Insurance Fund (NIF) Credit Facility

Types of Enterprises

Small enterprises employing no more than 10 persons, medium enterprises employing no more than 50 persons 

Use of Funds:

• Working capital and /or fixed asset purchases for enterprises involved in value added activities.
• Loan Minimum - $250, 000
• Loan Maximum: $5M per project

Interest Rate:

• No more than 10%
• Interest must be serviced monthly

Repayment

• Repayment period: Max 48 months – depend on the project
• Moratorium: 6 months on principal to the entrepreneur/enterprise

Eligibility Conditions

• Enterprise should be registered at minimum as a sole trader or there should be evidence that they have begun the process to formalize the business within a two month period.
• TRN & NIS numbers are required
• Applications for over J$2M requires a T.C.C.

Business Services Funded by NIF Funds

Funding is available to purchase fixed assets, that is, equipment and machinery; and for working capital, that is, purchase goods, raw materials, advertisement, and other value added expenses: 

Projects that can be funded include the following:

Light Manufacturing

• Apparel:  Clothing, caps, uniforms, dress, uniform
• Furniture:   Wooden and metal for house hold, office & business, hotel
• Food Processing: Including poultry and other meats, caned and bottled items, sweets, jams, bread and cakes, restaurant
• Beverages: Carbonated and none carbonated juices, health drinks,
• Chemicals: Detergents and soaps,
• Leather Goods: Belts, hand bags
• Craft Items: All types, straw, wood, leather, paintings
• Block Making

The National Export Import Bank of Jamaica Limited (EX-IM Bank) and the Peoples’ Cooperative (PC) Bank of Jamaica are designated participating financial intermediaries.

For information on how to become a member of the PC Bank click here

JEA/JMA Loan Programme

EX-IM Bank

The National Export Import Bank of Jamaica Limited (EX-IM Bank) working in conjunction with the Jamaica Exporters' Association (JEA) and the Jamaica Manufacturers' Association (JMA) offers loan facilities targeted at small exporters and manufacturers. This loan programme, which provides working capital support, is being funded by the EX-IM Bank and operates on a revolving basis.

The Purpose

The purpose of EX-BED is to help small exporters and manufacturers, who are credit worthy and have a stable business, to finance their working capital requirements and to purchase light equipment as they seek to expand their domestic and export markets.

Loan Amounts

The loan scheme is funded by the EX-IM Bank and administered by the JEA through which eligible exporters can borrow up to J$2 million, while manufacturers can borrow up to J$1.5 million. These loans are on a short term to medium term basis on concessionary terms of financing.

Eligible Borrowers are small exporters or manufacturers who:

 • Are linkage customers providing goods and services for the Tourism/Export sectors

• Employ less than fifty (50) permanent persons, and

• In the opinion of the JEA/JMA are:

• Export ready

• Have excess capacity

• Members of the JMA with respect to JMA loans

 Loans are available for:

• Raw Material Purchases, repayable in 90 days
• Receivables Financing, repayable in 120 days
• Light equipment purchase, repayable up to 18 months

Interest Rate

Interest is charged at the rate of 12 % per annum. Other charges relate to processing costs.

Documentation Required

A bank guarantee will not be required; however, borrowers will be required to demonstrate their credit-worthiness and their ability to service the loan. Applicants must provide:

• Current financial Statements
• Up-to-date Tax Compliance Certificates (TCC)
• Personal Guarantees

Where do I Apply?

 

Visit http://www.eximbankja.com/application.htm for application form

 

All completed forms must be sent to the JEA or the JMA, and not to the EX-IM Bank.

 

For further information, contact the EX-IM Bank directly or:

 

JAMAICA MANUFACTURERS' ASSOCIATION
Tel: 922-8880/2, 922 -8869
Email: jma@cwjamaica.com

 

JAMAICA EXPORTERS' ASSOCIATION

Tel: 920-6702, 960 -8884/4908
Email: jea@exportja.org

(Source: http://www.eximbankja.com/exbed.html)

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