Today, the Jamaica Observer publishes the second story on the nominees for this year’s Business Leader Award. All nominees for the award are non-private sector entities that facilitate the growth and development of private companies in Jamaica.

The National Export Import Bank of Jamaica (EX-Im Bank) is a certified friend of entrepreneurs, many of whom can trace their very survival to its doorstep.

The bank opened for business in 1986 to a productive sector that was chronically starved for foreign currency. Hamstrung by crippling interest rates, many companies found it increasingly difficult to compete in the export markets. Some had fallen into disrepair and were in desperate need of retooling.

This daunting environment infused the nascent institution with an urgent sense of mission.

The bank hit the ground running; it quickly identified the non-traditional producers that had realistic breakthrough potential, and placed them at the top of the priority list for special financial assistance.

From today’s vantage point, nothing seems out of the ordinary with the early beginning of the Government-run entity.

Except that, back in the 1980s the Ex-Im Bank, with its nationalistic mandate, placed the Edward Seaga Administration at odds with prevailing economic orthodoxy within the boardrooms of international lending agencies.

Third World governments, their economists insisted, had no business picking winners through discriminatory interest rate policy; entrepreneurs and the economies in which they operated were best served when left to the unfettered forces of the free market.

Today, the Ex-Im Bank has over 300 corporate clients — all beneficiaries of its policy of targeted assistance. These customers are exporters, agro-processors, garment manufacturers, distributors, artisans, furniture makers, in short a microcosm of the Jamaican entrepreneurial landscape.

This institution, with its impressive portfolio of success stories, stands as a triumph of the practical over economic dogma.

First, the big picture: this past year over $8 billion in loans reached the hands of local investors — over a billion more than the previous year — and in line with the bank’s policy, the bulk went to companies engaged in manufacture and agro-production.

The interest rates and the terms that the businesses are able to secure are much more favourable than the deals they could negotiate with commercial lenders.

In fulfilling its mandate, the Ex-Im Bank interfaces with three broad categories of entities within the market.

At the top of the food pyramid are the agencies from which it sources low-interest rate money for on-lending in Jamaica. These are institutions to which private companies have no direct access, but which this bank is able to tap through special dispensation — as a government company. Among them: the Inter-American Development Bank, the Ex-Im Bank of China, the Caribbean Development Bank, and the Development Bank of Jamaica.

The monies are passed through intermediary local financial institutions which typically process and disburse the loans to the applicants on behalf of the Ex-Im Bank.

Some of the beneficiaries are household names and include many firms that have, in the past, been nominated for the Jamaica Observer Business Leader Award — the very programme that is now bringing public recognition to the work of the bank which has supported their entrepreneurism.

Among them: Dolphin Cove, Wisynco; Jamaica Standard Products, subsidiaries of GraceKennedy Ltd; and mattress manufacturer Morgan’s Group of Companies.

Last year, the bank opened another funding source when it secured US$20 million from the PetroCaribe Fund — a pool that was created as part of Jamaica’s oil purchasing arrangement with Venezuela. That money was earmarked specifically for export-oriented local firms.

There is no shortage of loan windows at this institution, all precisely calibrated to meet the varied needs of its wide range of entrepreneurial customers.

For example, a businessman who is about to deliver an order but finds himself unable to meet the various pre-shipment costs can turn to the Ex-Im Bank for short-term funding. Similarly, firms that want to monetise the receivable on their books for quick turn-around funding of their next order can secure the cash equivalent from the Ex-Im Bank, using the receivable as collateral.

Post-shipment financing is another important facility that targets exporters whose goods are already onboard the outbound vessel, but who need the proceeds in their hands much faster than the normal payment cycle would allow.

Not surprisingly, the bulk of the Ex-Im Bank’s resources target factories that are retooling to improve their cost efficiency and export competitiveness. These customers have up to four years to repay the loan. They can also access funding to meet their working capital needs and for market research projects.

There is yet another feature that continues to endear the Ex-Im Bank to the entrepreneurs, companies and industries it serves, and that helps to cement its reputation as a friend of the private sector.

The bank is noted for the speed at which it responds to unexpected developments that could adversely affect its customers, and to emerging trends within the Jamaican economy.

Take the case of the passage in the USA of the Food Safety and Modernisation Act in 2012. This legislation imposed stringent safety requirements on food entering America and immediately added a new cost burden on Jamaican food suppliers to that market.

The Ex-Im Bank moved with dispatch to put in place a loan window enabling exporters who would have been out of pocket because of the new costs, to meet the new safety rules.

Another example is the speed at which the lender created a special loan package for importers of raw material and capital goods, in response to Government’s imposition of new fees for clearing imports.

The bank is clued into market trends and consistently demonstrates policy flexibility by the manner in which it embraces new industries, and its willingness to take risks with unconventional business ideas.

Its 2005 initiative to make loans available to students pursuing certification in information technology comes to mind. The nearly $600,000 per year that was made available to each candidate was designed to develop a skills bank that could support Jamaica’s ambition of becoming a big provider of information technology services.

The creative industry has also come on its radar — with a pool of funds set aside for entrepreneurs seeking to get into the business, including animation development.

The special low interest rates that it provides for investments in renewable energy and energy efficient equipment are also nods to national developmental priority.

The Ex-Im Bank is not averse to developing ad hoc loan facilities, as was the case last year summer when it launched the Jamaica Loan Programme. This pool was open to companies that wanted to exploit export opportunities that came about by the favourable exposure that Jamaica enjoyed during the Summer Olympic Games in London.

— moseshbsjackson@yahoo.com

The Business Leader Award will be held on Sunday, December 1 at the Jamaica Pegasus Hotel in Kingston beginning at 4:30 pm. The programme this year is sponsored by: