Sabrina N. Gordon, Business Reporter

Wayne Wray, president of First Globank Bank. - File

First Global Bank (FGB), a member of the GraceKennedy group, has secured US$6 million (J$432 million) of credit from the Inter-American Investment Corporation (IIC) to be used for medium- and long-term subloans to small and medium enterprises (SMEs).

The IIC loan was approved in September but FGB has opted not to disclose the details of the terms.

"The loan terms to FGB from the IIC are market rates," said bank president Wayne Wray.

According to a release by the IIC, an affiliate of the Inter-American Development Bank (IDB), the funding should make it easier for FGB to compete with local and international banks in providing credit to businesses.

First Global is ranked No. 5 among the seven commercial banks that operate in Jamaica, and is the only one owned by a Jamaican-based company.

Its assets total $24.6 billion as at June 30 in a sector valued at $530 billion.

Businesses to benefit

The bank will target loans primarily at the manufacturing and export sectors, but says other businesses stand to benefit.

"We would like to target the productive sector - exporters, manufacturers - but any local business can benefit," said Wray.

Loans with tenors of up to four years will be extended to businesses at an interest rate that will depend on the credit risk of the borrower.

"Loans could be extended in Jamaican-dollar or US-dollar at competitive commercial rates," Wray explained.

The average loan size, he says, will be about US$150,000 or J$10 million, but applicants can borrow up to three times that amount.

"As we anticipate loan proceeds to be spent on capital equipment for retooling, we anticipate capping each borrower to US$400,000 or J$30 million," said Wray.

The loans can be accessed through any of the bank's four branch networks. It is estimated that at least 36 SMEs will take up loans.

The start date for disbursements has not yet been determined as the drawdown date for the IIC loan is still to be finalised.

Funding approval

As at September 30, the IIC had approved funding for 10 projects in Jamaica valued in excess of US$47million.

The IIC provides financing in the form of equity investments, loan guarantees and advisory services to private enterprises in Latin America and the Caribbean.

FGB has tapped IDB funds before. Last year, the bank was granted a US$5 million credit line for international trade loans.

sabrina.gordon@gleanerjm.com.