Take the lead ... Samuda tells Byles to get banks to lower fees and embrace small businesses

THE LOCAL banking community has been challenged to give impetus to economic growth on the island by lowering rates and being friendlier to small- and medium-sized businesses and start-ups.

Karl Samuda, the opposition spokesman on industry, who made the call, was responding to a suggestion from Richard Byles, co-chair of the Economic Reform Programme Oversight Committee, that the private sector work with the Government to set up a US$1 billion fund to finance projects in high-growth sectors such as business process outsourcing and agriculture.

"I think it is a good idea, except that he doesn't have to go very far because he is a part of the banking community that has so far not responded in a sufficiently favourable way to the development of micro, medium, and small businesses in this country," Samuda said.

The Jamaican Government has raised US$2 billion on the international capital market, US$1.5 billion of which will be used to pay down the country's PetroCaribe debt.

Challenged private sector

Byles, head of Sagicor bank, has challenged the private sector to step up to the plate and match the US$500 million.

"Let us have a billion-dollar fund and take that fund and invest it in projects, in economic activities that are productive, that give permanent jobs to Jamaicans," he urged.

Speaking at a press conference earlier this week at the Jamaica Labour Party's Belmont Road headquarters in Kingston, Samuda said Byles and his banking colleagues must lead the way in driving economic growth.

"The first thing the banking community must do is to assess the extent to which their contribution to this process will be served by an immediate reduction on the rate of interest charged to emerging small business and the time frame it is taking to get the approval of these facilities that small business cannot exist without," Samuda said.

The opposition spokesman, who is also chairman of Parliament's Economy and Production Committee, which recently considered banking fees, said that spreads between the interest rates at which banks borrow money and the rate at which they lend need to be reduced.

"There is no way going forward with spreads between 12 and 16 per cent as exist now," Samuda said.