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DBJ cuts interest rate to low 8% to target renewable energy projects

The Development Bank of Jamaica (DBJ) has cut its interest rates to single digit, citing a reduction in the cost of its funds.

Effective November 1, DBJ said interest rates on loans to small and medium-size enterprises (SME) offered through its approved financial institutions was dropped as low as 8.0 per cent.

“There has been a reduction in DBJ’s cost of funds resulting from the general decline in interest rates,” said the development bank on Friday.

“There has also been a reduction on the interest rates charged to the DBJ by the PetroCaribe Development Fund,” it said.

On Friday, DBJ said SMEs operating in the productive sectors will now access loans at rates between eight per cent and 9.5 per cent on Jamaica dollar currency. Previously these companies accessed loans at 11 per cent.

The development bank also said loans for energy projects would also be priced at a special interest rate of 8.0 per cent.

“This is aimed at supporting projects that promote energy efficiency, energy conservation and renewable energy,” the release stated.

The DBJ drop in rate follows behind several private lending institutions which have in recent time have reduced rates on loan products.

Those institutions have been responding to the signal of the central bank, which implemented another cut in its policy rate in September to 6.25 per cent, while mortgage loans are cheaper as a result of the backing provided to lenders by Jamaica Mortgage Bank.

Milverton Reynolds, managing director of DBJ, was encouraged by the downward trend in rates, hoping to see even further cuts.

“The DBJ is pleased by the reduction in rates by other financial institutions as this trend will benefit small businesses and the overall economy and we hope that this will result in further reductions in general interest rates,” said Reynolds in the release.

DBJ’s loans can be accessed through the wide branch network of approved financial institutions, which include all commercial banks, credit unions, the National People’s Co-operative Bank, EXIM Bank, Jamaica Money Market Brokers and Capital & Credit Merchant Bank.

DBJ’s interest rates were last revised in December 2010.

Category/ies:Jamaica News.
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