Growth & Jobs | Tourism loan scheme to be expanded
Almost $1b in loans already dispersed through JN under the partnership
Published:Tuesday | June 21, 2022 | 12:08 AM
Tourism Minister Edmund Bartlett has announced that the Tourism Enhancement Fund’s (TEF) 5x5x5 loan scheme is to be expanded.
The boost to the product is in line with the tourism ministry’s ‘Reimagining Tourism’ efforts to strengthen the resilience of the tourism sector, as it continues to recover from the effects of the COVID-19 pandemic.
Bartlett said the details of the enhanced loan programme will be provided at a later date.
The current TEF 5x5x5 loan, which is a component of a wider TEF loan programme that commenced in 2007, is offered to entrepreneurs operating in the tourism sector to expand and refurbish small hotels and tourist attractions, and to purchase motor vehicles used for tour operations. It is provided to persons through a partnership agreement with the JN Bank Small Business Loans Division.
Referencing figures presented by JN Bank while speaking at the business information session for small and medium tourism enterprises in New Kingston recently, Bartlett disclosed that some $900 million has been on-lent via JN to businesses in the tourism sector since the emergence of the TEF programme.
“They still have the capacity to lend again because it revolves,” he disclosed.
Garfield Palmer, chief, SME Unit in the JN Bank Small Business Loans Division, who also spoke at the session, pointed out that the TEF 5x5x5 loan has accounted for more than half the TEF loans disbursed by JN Bank to entrepreneurs within the industry.
DISBURSEMENT
“Up to April 30, 2022, we have disbursed a total of 430 loans through (the) TEF programme, valued at nearly $900 million. And of the 430 loans distributed, the 5x5x5 continues to be the most accessed, with 278 loans issued to date under the programme,” Palmer said.
“The maximum loan amount offered is $5 million at an interest rate of five per cent per annum on the reducing balance. And one can receive up to six months’ moratorium on the principal, if necessary,” he disclosed.
He explained that JN Bank also offers two other TEF loans under the current partnership agreement – the TEF Default Carriage Loan and the TEF Community Tourism Loan.
“The TEF Default Carriage Loan, which is a no-interest loan, was created to allow for the partial or full payout of loan arrears accumulated on a Tourism Transportation Loan by, for example, members of JUTA, JCAL or MAXI Tours.
“The TEF Community Tourism Loan is geared towards helping all MSMEs in Treasure Beach, St Elizabeth, which are a part of tourism-related project that impact on the growth and development of the tourism sector,” Palmer explained.
Beyond the funding available through the TEF, Bartlett used the occasion to also encourage players in the sector to broaden the spectrum of experiences they provide to visitors, and to deepen their value.
“Because we have decided that our thrust in recovery is not about the competitive nature of the past; that tourism’s recovery, for it to be meaningful, strong, effective and contribute more to [the] growth of our economy, cannot be a reset but a ‘reimagining’. Reimagining means new ideas, it means innovation, it means capacity to pivot, adapt and be responsive on a moment’s notice; to be in line with the changes that are taking place in the market and in the local community,” he said.
He added that the immediate and post-COVID periods will not be linear or characterised by predictable movements, and so will remain a period of relative uncertainty.
The tourism minister encouraged entrepreneurs attending the session to use the resources made available to them wisely to assist in their growth and development.
“Our partner, UNESCO, has opportunities; the Development Bank [of Jamaica] has opportunities; and various other areas that you can draw on to enable the economic resilience-building that is so critical to the future of your growth and the economy of Jamaica,” he stated.
He pointed out that 80 per cent of the value of the experiences of tourism worldwide is driven by small and medium enterprises.
“The unfortunate fact, however, is that less than 20 per cent of the returns of tourism go to this sector. So as we rebound and reimagine, we are bringing a new dynamism to that process; and we are trying to rebalance that anomaly, that asymmetry that exists, in favour of our small and medium enterprises,” he said.