According to PM Golding, “We face a problem that we are not able to match good ideas with collateral. Very often, people come forward, they have good ideas, they are well-intentioned, (but) they lack the collateral and very often they are excluded from credit financing.”

The news of the Government’s plans coincided with the retroactive approval of a $150-million loan guarantee from the Development Bank of Jamaica (DBJ) to the Jamaica Business Development Corporation. The loan is repayable over seven years and attracts annual interest of seven per cent; the funds have been on-lent to micro and small-business operators at 10 per cent per annum.

Prime Minister Golding said specifically, “I am very insistent that the Government has a responsibility to start to direct the resources. If you want to access resources on terms that are preferential, then you must understand that those who are making the funds available have an investment in ensuring that you study something that is useful, something that the country needs.“

Prime Minister Golding said said: “You probably know that we are introducing a new policy now. We can’t commit to it as yet, where we are going to align the repayment to your income so that you can borrow money from the Students’ Loan Bureau. You complete your degree and you get your job but to calibrate your repayments so that it takes into account your level of income. We have to put it to the SLB.”

He added that the philosophy behind lowering student repayments is that educated persons are a long-term asset to Jamaica, and a student loan can be considered in the same way as a long term loan.

He specifically said … “Yesterday (Monday, September 7) I had a meeting with Andrew Holness, who is leader of the House of Represen-tatives, and Minister (Audley) Shaw, who has responsibility for the bill, to try to see if we can get it through that committee as soon as possible so that we can bring it into law“.

He said also that he has asked the finance minister, Audley Shaw, to ensure that the law be retroactive so that a person’s credit history can be tracked “five, 10 years in the past“, and added that “a credit record is important because if I’m a lender and you are coming to borrow money and you bring a house title with you, but somebody else comes and he doesn’t have a house title but he has a (good) credit record …. I’m going to be more inclined to lend that person than the person who has the title.”

He said that the bill was part of a wider effort by Government, to address some of the systemic institutional challenges currently facing the establishment and growth of small businesses here in Jamaica.

Notably however, officials of the Jamaica Bankers’ Association have reportedly contended already, that some current provisions of the draft legislation were not workable. One of the biggest concerns for the bankers was the question of at what stage customers’ consent would be required. In its current form, the legislation requires the credit-information providers to first obtain customer consent. Similarly, for a credit bureau to release credit information, it would first have to seek the customer’s consent. The bankers fear that this will increase the time taken to access credit.