KINGSTON, Jamaica, December 31, 2009 – The National Export-Import (Ex-Im) Bank of Jamaica is reporting that it achieved a significant milestone during the 2008/09 fiscal period, with its loan usage totalling J$6.5 billion (US$75 million).
This was an increase of more than 35 per cent over the J$4.8 billion (US$55.5 million) achieved for the previous year. “This performance was particularly gratifying, as the Bank faced numerous challenges during the period, most notable of which was the unprecedented financial crisis which affected banks and other financial institutions globally,” the Bank’s annual report for the period said.
The report outlined that the year marked the successful continuation of the Bank’s three-year strategic plan (2008-2010), which included the implementation of a number of initiatives to prepare for future challenges, and to maintain a viable and sustainable organisation.
Also, in keeping with its strategic plan and the demand for export credit insurance, the Bank rolled out its Trade Credit Insurance (TCI), in the first quarter of the review year. This facility provides insurance protection against commercial risks of non-payment by foreign and local buyers. The policy covers 86 per cent (commercial risk) and 90 per cent (political risk) of the loss amount, with the policyholder assuming the remaining percentages. Political risk refers to the risk of loss caused by changes in a country’s political structure or policies, such as tax laws, tariffs, or restriction in repatriation of profits.
Meanwhile, the Ex-Im Bank also experienced its own challenges, chief of which was the difficulty in sourcing low-cost Jamaican Dollar funds to meet the expanded demands of its customers.
“Resulting from the funding limitation, the Bank was forced to curtail its lending activities during the second half of the financial year,” the report said.
Nevertheless, several initiatives were pursued to obtain funding at competitive rates of interest. These saw the Bank securing additional loan funds of J$1 billion (US$11.5 million) from PetroCaribe and another J$38 million (US$439,052) from the National Insurance Fund, after having fully disbursed the J$100 million (US$1.1 million) it received in 2008.