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MONTEGO BAY, Jamaica; Wednesday, September 22, 2016: The Tourism Enhancement Fund (TEF) has committed $1 billion to provide well needed loans to small and medium-sized tourism enterprises (SMTEs) to boost the sustainable growth of the industry.
A Memorandum of Understanding (MOU) for the EXIM Bank to administer the revolving loan scheme and make disbursements to successful applicants was signed on September 21, 2016 with the TEF at the Hilton Beach Resort & Spa.
Minister of Tourism, Hon. Edmund Bartlett outlined that the money “is to provide well needed banking support to SMTEs and those companies which play a part in the tourism value chain.”
Operators in the SMTE sector will be able to access from a minimum of $5 million up to $25 million at 5% interest for five years. However, EXIM Bank will consider viable projects that might require more than the ceiling. The rate of interest for any such project will be slightly higher.
Minister Bartlett said there was a need for the tourism sector to have its “discreet lending institution that responds to the needs of tourism” and this initiative was setting the foundation for fulfilling a plan which he first mooted earlier this year at a Tourism Linkages Speed Networking event, for a bank dedicated to the sector. It will be modelled off the Dominican Republic’s Banco Popular.
In an open invitation to Jamaicans to get on board the tourism value chain, Minister Bartlett cited the need for locals to take charge of production and services to meet the consumption patterns of today’s travellers and enable greater retention of the tourism dollar. “I am determined that on my watch tourism will not relegate itself into being a plantation; we are going to be an industry owned by the people,” he declared.
“You merely need to have an idea that can be converted to material value with a price because the consumption pattern is about people’s passions” which have no limit, he said.
While tourism remained the largest and fastest growing enterprise in the world, Mr. Bartlett pointed out that it was dominated by small and medium-sized tourism entities. “These SMTEs contribute significantly to the authenticity and quality of the tourism experience and there’s little doubt that these businesses play a significant role in destination competitiveness,” he stated.
Although individually these business employ few people, Minister Bartlett said “collectively the employment generated by SMTEs reliant on visitor spend can be highly significant.” Further, he added, “these SMTEs encourage visitors to spend in local communities, thus stimulating the multiplier effect.”
Mr. Bartlett said because of the critical inter-dependence between tourism and SMTEs, “providing access to financing to enable these enterprises to capitalize on business opportunities and so participate in the supply chain that the sector generates, is essential. It also helps to foster the development of a more inclusive tourism industry that not only benefits our visitors but Jamaicans too.”
The $1 billion will be disbursed to the EXIM Bank in tranches with $500 million being made available in the first instance. The revolving loan facility received endorsement from the Jamaica Hotel and Tourist Association (JHTA).