Small and Medium size existing private businesses throughout the country can access US$3 million at their disposal in loans from the Barbados-based Caribbean Development Bank (CDB) through its CDF Loan Programme.
The funds are being made available under the Country Assistance Programme that was signed early last year between the regional bank, the Government of Grenada and the Grenada Development Bank.
Speaking during a press conference last week Tuesday to launch the start of the project, Manager of GDB, Mervyn Lord disclosed that the total funding package received is US$3 million and would be used to assist small and medium size enterprises.
The package includes a grant-funding component of US$185, 629.00 for Institutional Strengthening to be utilized for applicants seeking assistance with their business plan preparations through training to improve competitiveness of their businesses.
In addition, US$297,778.00 is allocated to cater specifically to the Hotel Accommodation Sector in an attempt to reduce energy consumption.
Under the terms, a total of $40,500.00 is available per party.
The first disbursements of the funds from the Caribbean Development Fund were received in January in the amount of EC$2.661 million and of this amount, EC$1.215 million have already been allocated as approved loans for projects.
The earmarked funds are to be used to facilitate the development of agriculture, industry, tourism and other services by supporting innovative upgrading and replacing of plants and equipment, as well as improving enterprise competitiveness and export capability.
According to Lord, those persons who have had their loan applications approved can use the funds received to improve the competitiveness of their businesses in terms of training enhancement, equipment replacements in order to gain ISO Certification.
The funds cannot be used for purchasing of land or building unless for expansion purposes.
Each qualifying applicant can receive a maximum of $405,000.00 at an interest rate of 8.5%. However the Bank will only finance up to 80% of the project.
The loans received must be repaid within 10 years with a grace period of two years but the interest must be paid during the two years.
Security accepted to secure loans are cash, legal mortgages, Bill of Sale on Machinery or Equipment, Insurance Policy, Shares from reputable companies and supported guarantees.
Lord said that the fund is not a revolving one and must be implemented within two years.
Permanent Secretary in the Ministry of Finance, Timothy Antoine said that Government is fully committed to small business development in Grenada since they are seen as important to the development of the New Economy that was promised by the 16-month old Keith Mitchell-led administration in St. George’s.
According to Antoine, small businesses provide up to 40 to 50% of all employment in Grenada and if the economy is to grow, government must help in the growth of small businesses and this is precisely what the fund is aimed at doing.
He said that an additional line of credit would soon make provision for student loans and other small businesses within months.
The senior public officer disclosed that the monies being received from the Caribbean Development Fund was made possible after the Mitchell regime fulfilled its contribution of US$1 million to the fund as it was neglected by the former Congress government of ex-Prime Minister Tillman Thomas.
The agreement was signed with the Fund in October 2013 when Government paid its US$1 million in order to try and access US$4 million from the facility.
PS Antoine stressed that Government is investing in GDB and was looking forward to see the local financial institution deliver by making sound decisions in facilitating loans to those most in need.