Jun 2010 Financial News

RBTT offers discounted forex loans

Jun 18, 2010

RBTT Bank Jamaica has launched a foreign currency credit line for small and medium businesses, offering loans of up to US$250,000 at a discount.

The US$10-million fund is available for subscription at 7.5 per cent and 8.0 per cent interest by the export and productive sectors, including but not limited to manufacturing, agro-business and tourism, the bank said Tuesday.

Across the commercial-banking market, foreign currency loans at February, the most current data compiled by the Bank of Jamaica, were selling at a weighted rate of 8.57 per cent.

RBTT is the third bank to launch targeted financing at producers as interest rates trend down, but is the only one offering dedicated USD debt capital.

Bank president Minna Israel sold the offer as a supportive response to Government's efforts to reign in the cost of credit that began with the swap of expensive state-issued bonds for cheaper instruments priced six points lower at an average of 12 per cent.

Policy rates set by the Bank of Jamaica were last reduced by half a point Wednesday to 9.0 per cent on the central bank's JMD market instruments, almost four points below the average commercial-loan rate of 12.93 per cent.

Israel said RBTT was developing other initiatives in answer to the call by businesses for cheaper financing, but did not elaborate.

Jamaican manufacturers have been pushing aggressively and consistently for low single-digit loans to compete more effectively with trading partners such as Trinidad and Tobago.

The USD funds are for trade financing and capital expenditure for plant upgrade and business expansion, said RBTT in a statement. The smallest loan on offer is US$50,000, the spot equivalent of J$4.3 million.

Subscribers to the funds must be registered Jamaican companies at least three years in operation and earners of foreign exchange.

Repayment terms were not disclosed.


Source:
business@gleanerjm.com
Jamaica Gleaner
Friday June 18, 2010

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