By Darius Phillip
THE Small and Medium Enterprise (SME) Loan programme was revised to allow applicants greater ease in transitioning to the disbursement phase.
The Minister of Finance Colm Imbert said on Monday at the Ministry of Finance’s media conference on financial matters that he and the Central Bank of Trinidad and Tobago have reviewed the barriers posed by the 2020 SME loan programme.
Imbert said, “Forty-seven percent of the persons who were turned down for one of these SME loans were unable to provide evidence of up-to-date VAT payments, income tax, corporation tax payments and NIS payments.”
The minister also said that companies would not want to provide the 25% of standard credit payment or collateral while the government agreed to handle the remaining 75% as well as the inability for 16% of applicants to satisfy the banks debt service requirements for the SME programme.
He said the debt service requirements were lowered previously from the standard banking requirements for the SME programme.
Imbert also said that a number of applicants could not provide any financial statements as well as having weak credit with businesses running at a loss.
The revised programme will now:
- Extend the five-year repayment of loan to seven years.
- The government will now guarantee 100% of the loan amount.
- Purposes in which the loan could be used for now include fixed assets, plant and machinery, expansion of accommodations, etc.
- Increase in the amount of the available loan as required.
- Will go back to the year end of 2018 for persons to be up to date on all payments. They will be given one year after receiving the loan to be full updated.
- Maintaining a 0% interest rate on all payments.
Imbert also redefined what will be considered a small or medium enterprise saying, “Small and medium enterprises will now be defined as entities, companies, with revenue of between $500,000 to $25 million per year, annual revenue.”
The minister said that out of the 300 companies that applied last year, only 272 were successful in getting the SME Loan.
He said that in terms of the total amount spent on Covid-19 relief, the government crossed over $5 billlion mark and in the next budget there will be an amount for residual Covid relief going into 2022.
In closing the Minister said, “We do believe after all the consultation we’ve done that this will assist tremendously in allowing persons to access these facilities.”
