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Financial News

Oct 2009 Financial News

Scotia opens $500-m, low-cost loan facility

Oct 14, 2009

Scotiabank on Monday launched a low-cost, $500-million loan facility geared towards small- and medium-sized enterprises (SMEs).

The Productive Sector Growth Fund, as it is called, will offer an interest rate of 9.95 per cent towards "stimulat(ing) production through the creation of new businesses and the expansion of existing businesses".
The fund is the third such facility the bank has launched since 2006.

In 2006, Scotia introduced a $1-billion production fund and in the following year started a $400-million SME Development Programme. Those programmes offered rates of 9.5 per cent and 8.625 per cent respectively.

The current fund will make $75 million available to businesses under two years old while the remainder will be dedicated to businesses wanting to expand and improve production.

Bruce Bowen, president & CEO Scotiabank Group, said the launch of the Fund is a strategic intervention to stimulate production and support the Jamaican economy in a challenging time.

"We are being consistent with our history of proactively creating facilities to stimulate production and economic growth in times of hardships; hence this Fund will contribute to stimulating employment, increasing local productivity, and generating more products for exports at a time when our country is being impacted by worldwide negative economic conditions," he said.

Entrepreneurs with businesses less than two years old can borrow from a minimum of $2 million to a maximum of $5 million as a Smart Start SME Loan, and businesses in the agricultural sector can borrow up to $2 million. Entrepreneurs with established businesses in need of expansion can borrow between $5 million and $40 million for the acquisition of new capital, retooling and the modernisation of products or for working capital.

All applicants are required to present a business plan, cash flow projections and information to support the viability of their projects.

Going back even before 2006, this new programme is the seventh concessionary loan facility launched by Scotiabank in the last 11 years, totalling $4.65 billion.

Finance Minister Audley Shaw said that "this initiative... (was) very timely and can be appreciated as a significant private sector-led stimulus package for small- and medium-sized businesses".

Shaw, in a press statement released yesterday, challenged the commercial banking sector and other players in the financial services sector to continue to open windows of opportunity to small entrepreneurs.


Source:
Jamaica Observer
Wednesday October 14, 2009

http://www.jamaicaobserver.com/magazines/Business/html/20091014T000000-0500_161749_OBS_SCOTIA_OPENS______M___LOW_COST_LOAN_FACILITY.asp