Kingston (JIS) By: Douglas McIntosh
Friday, May 16, 2008

The National Export-Import (EXIM) Bank of Jamaica and the Scientific Research Council (SRC) are collaborating to provide a special facility, aimed at boosting production, particularly in agro-industry.

This initiative will see the bank making funds available to micro, small, and medium-sized enterprises, which utilize technologies produced by the SRC.

Deputy Managing Director of the EXIM bank, Megan Deane tells JIS News that the thrust forms part of the institution's strategic decision to "deepen and widen our capabilities to support the productive sector in Jamaica."

"One of the things that we determined, when we articulated our 2010 vision, is that we wanted to increase our appetite for risk. One of the ways in which we are doing that, is to identify strategic alliances with which we can work in terms of reaching broader audiences to support their productive capabilities," Miss Deane explains.

Deputy Managing Director of the EXIM Bank, Megan Deane (left), in discussion with Managing Director of R. J. Sauce Company in May Pen, Clarendon, Richard Jones (centre), and Executive Director of the Scientific Research Council (SRC), Dr. Audia Barnett during a recent EXIM Bank/SRC Symposium at the Council's Old Hope Road offices in Kingston.

She says the SRC approached the institution proposing a collaboration, which will facilitate manufacturers and food processors seeking to tool and retool, utilizing the Council's technical capabilities, and being able to source funding from the bank, on submission of business proposals endorsed by the SRC.

While pointing out that SRC approval of the application does not necessarily guarantee financing, Miss Deane says the endorsement will go a far way in assuring the bank of the applicant's access to the requisite technical applications that can and will enhance their operations and activities. She adds that the synergy between both entities assures prospective entrepreneurs and interests of the financing available to them.

"We want them (applicants) to know that when they go to the Scientific Research Council and buy formulation to make a particular product, whatever that may be..they can, with the SRC's endorsement, and the marketability of that formulation, package their product and project, and come to us for the financing to turn that into a business. We want to help them with their business development," Mrs. Deane tells JIS News.

She points out that the bank has different lines of loan facilities which can be accessed, depending on the clients' needs. These include provisions through the National Insurance Fund (NIF), and a small business facility.

"The National Insurance Fund is our most preferential (facility), and ranges between eight and 10 per cent. But the maximum that you can borrow on that line is $5 million for 48 months. (For) our small business facility .you can borrow up to $10 million at 12 per cent, and that is also for 48 months. If they (clients) need more money than $10 million, then there are different lines that we can use for them to access," Miss Deane outlines.
She adds that depending on the amount of money required, "we will certainly give them our most preferential priced funding (facility). or we can blend the sources, so that they come out with the best average cost of funds that we have available."

The Deputy Managing Director points out that persons can also access financing through the institution's approved financial intermediaries (AFIs), which include commercial banks, among other entities.

"They can go to their institutions, where they already have banking relationships, and ask to access our funding. The institutions are well aware of what we are able to provide, they know the mechanisms to do it, and they are able to send the applications in to us very readily," Miss Deane informs.

She says the bank recognises its mandate of facilitating economic development, and the institution will use whatever means necessary to apprise producers with ideas for development, who are in need of working capital, to approach them.

To this end, the EXIM Bank and the SRC recently staged a symposium entitled - 'Supporting Micro, Small, and Medium Enterprises' at the Council's Old Hope Road offices in Kingston.

Speaking with JIS News, Executive Director of the SRC, Dr. Audia Barnett, says the workshop was aimed at "getting micro and small (and medium) enterprises au fait with the products and services of (the) EXIM Bank, as it relates to financing the sale of technologies.. produced by the Scientific Research Council." The 30 participants, she points out, were drawn primarily from the agro-industrial sector, and came from various parts of the island.

Dr. Barnett explains that the SRC tries to target persons who they have trained in the use of the organization's various formulations and technologies, who have bought them, or who have undertaken research and development, and who the Council feels may need assistance in either streamlining their operations or starting businesses.

She notes that the current partnership with the EXIM Bank evolved out of an experiment, jointly undertaken, which yielded success. This, she explains, entailed the creation of a technology incubator at the SRC, which could accommodate a single individual or entity utilizing the facility for production over a period of time, for which the SRC approached the bank some three years ago for assistance. The move came after an entrepreneur approach the SRC for assistance to kick start an operation.

"The fact that the person was using the facility meant that other persons couldn't utilize it. So, it was in our best interest to try and find a way to get this person to grow. We went to them (EXIM) with the proposal to outline the fact that this (technology incubator) was a tried and proven technology, and outlined that the person had consistent market demand, and was meeting the demand. But the person (had) reached the point where she wanted to expand, and wanted to do more than we (SRC) could accommodate," Dr. Barnett says.

To this end, she said discussions were held, and after an initial meeting, the bank commenced direct liaising with the client, working out a business plan in the process.
"The client, I am happy to say, early this year, opened her factory (a smokehouse), and the factory is really one to be proud of. This person can now be a motivation for others," Dr. Barnett proclaims proudly.

Dr. Barnett informs that some of the technologies produced by the SRC, for which financing is being made available, include those used for drying and, by extension, preservation of foods, particularly spices and teas; those for smoking, in the case of meats; and canning and concentrate applications, in the case of fruit and vegetable processing. "So, it (SRC technologies) span various food processing operations," she points out.

While noting that the SRC is based in Kingston, Dr. Barnett says the organization has some three contact points in Montego Bay, Westmoreland, and Mandeville, where persons can source information on accessing the SRC's products and services. Additionally, she says these "outposts" are used to stage fora with stakeholders as the need arises.

Miss Deane advises that the EXIM Bank has similar arrangements with the Jamaica Manufacturers Association (JMA) and the Jamaica Exporters Association (JEA), which facilitate their screening of applications for funding through these entities, adding that they are exploring the possibility of replicating this with other entities.

"We are also looking at arrangements with the Jamaica Business Development Centre, and we are going to be looking at a similar thing with the Small Business Association (of Jamaica). We recognize that being in one location, we don't have the geographic reach that we need to access all (of) the producers out there, to know who they are," she says.

Miss Deane tells JIS News that as at March 31, approximately $4.8 billion in funding support had been disbursed, with the NIF and the small business facility accounting for upwards of $300 million of this amount.

"We just started on-lending the NIF facility, but we have a $100 million commitment from that source of funds that we are trying to put out there. We really have been trying to get the word out there that we are available to support productive endeavours," she points out.