EXIM bemoans slow take-up of loans

Guests particpate in a recent Jamaica Observer Business Forum at EXIM's 85 Hope Road offices in Kingston. From left are John Mafood, JMEA president; Lisa Bell, managing director of EXIM; Winston Lawson, business development consultant: and Colin Ebanks, general manager of corporate services at EXIM.

With over $1 billion in its portfolio left to lend this year, business development executive with the National Export-Import Bank of Jamaica (EXIM Bank) Winston Lawson has bemoaned the slow pace of take-up for loan products offered by the development financing institution.

"I think EXIM has put together loan products that are feasible and are actually required by the market, but what has been challenging and is also one of my main concerns, is the slow level of take-up and response," he said during a Jamaica Observer Business Forum held recently at the company's Hope Road offices in St Andrew.

Lawson said that while he understands the rudiments of business lending which may cause some borrowers to shy away, the bank, though still judicious in its management of risks, has overtime adjusted some of its requirements in hope of attracting more businesses.

"I think we have the right products but I think we just have to continue to seek more buy in," he added.

On the other hand, EXIM's Managing Director Lisa Bell, citing concerns about the level of apathy existing in the market as a result of the novel coronavirus pandemic, said that what has generally been found is a recurring level of fear spurred by cautious optimism.

"People are afraid, even companies are afraid — they just came out of a COVID period, where a lot of their earnings had dried up and now looking at the possibility of a recession for our major trading partner, people are a little [conservative] and are trying to hold strain," she said.

Pointing to a classic example, she indicated that even with a rebound in tourism, substantial funds under its small and medium-sized tourism enterprises (SMTEs) loan product remain available for lending. The product offered in partnership with the Tourism Enhancement Fund (TEF) enables industry stakeholders and operators of SMTEs to access funds needed for growth, expansion and capacity building. Under the facility enterprises can borrow up to $25 million at an interest rate of 4.5 per cent per annum with up to seven years to repay.

Bell said that after providing loans valued at over $4.2 billion in 2021, though significantly down from a record $9.4 billion in 2017, the bank is looking to offer greater capital support this year despite what she said was also a decrease in funding seen since the outbreak of the pandemic after the demand for loans dried up and the ability to borrow diminished.

Pointing to the emergence of new opportunities, she, however, implored businesses to move towards unlocking higher levels of growth post-COVID and not allow fear to paralyse their success.

"All banking is difficult, but just come in to let us sit down and have a talk with you — a lot of our marketing efforts right now are to invite persons to come for sitdowns with our representatives to see how best we can together navigate the challenges," she said, noting also that the bank usually does not make a habit of turning its back on clients once their projects can satisfy the basic prerequisites.

"We also do not abandon clients, so if they have something missing, we can still direct them to various other entities throughout the public service," added Collin Ebanks, general manager of EXIM's corporate services.

Boasting some of the lowest interest rates currently available in the market, EXIM, through other incentives such as unsecured lending, said it will continue to support the use of various collateral forms, through which it also hopes to increase borrowings.

"We are also not regulated the way a commercial bank is, so we have more flexibility. Therefore, with our collateral offerings, businesses can bring a mixture of equipment, real estate, receivables and inventory," Bell said.

"EXIM also provides that direct lender relationship and you don't have to go through a commercial bank, which is a big plus for our members when accessing products," added president of the Jamaica Manufacturers and Exporters Association (JMEA) John Mahfood who was also a guest at a the forum.

Forecasting better results for the remainder of this financial year, Bell said she is anticipating an uptick, especially as industries such as tourism continues its strong rebound, and even as others such as manufacturing accelerates the pace of e-commerce.

"At EXIM what we will continue to do is to focus on our processes as we look at the areas of opportunity to make sure we are servicing our goals this year. We are [so far] behind on our target for this year, but we are catching up quickly," she stated.

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