$4 million programme to combat financial turmoil
Leader of Government Business McKeeva Bush says a new low cost loan programme announced last week will help small businesses and individuals weather the economic downturn.
Speaking at a government press briefing Thursday, Mr. Bush said the low cost loans, being offered through the Cayman Islands Development Bank, will feature interest rates as low as 1.5 per cent.
Small businesses that qualify for the program will be able to use the loans to pay off debts, cover operating costs and to purchase new capital equipment.
Individuals who are at risk of home foreclosure or who are suffering ‘other financial distress’ will also be eligible for the loans, as will homeowners wanting to buy hurricane shutters or pay insurance premiums.
Officials did not say whether then program will be means tested but promised to reveal more details next week.
‘This program by the development bank does not purport to solve all of the issues,’ Mr. Bush insisted. ‘Indeed, the limited funding available to the development bank and the government makes that task unrealistic.’
But he said he is confident the program will help minimise the fallout from the current global financial crisis.
Mr. Bush said the bank will also offer 25 to 30 year mortgages with interest rates of five per cent to allow individuals to consolidate existing personal and property loans.
The bank will also offer low cost funding to assist individuals in bringing their loan instalment arrears up to date. These loans will be offered at 1.5 per cent interest and will be spread over ‘a suitable period to allow the monthly payments to be comfortable for these individuals, recognising they will still have to carry their mortgages,’ Mr. Bush said.
“By providing this assistance through the development bank, the Government will ensure that we will utilise the bank’s expertise in lending and credit risk management.”
The $4 million program, which represents 12 per cent of the bank’s total portfolio, is due to be launched on Monday, 13 July. Bank officials say they plan to raise more money for the program in the private sector in the coming months.
Mr. Bush also announced a new chairman and new board members for the development bank at Thursday’s press conference.
He appointed his close economic advisor, Paul Byles, as the chairman of the bank. Mr. Byles is a trained economist that has worked in the banking sector, as a regulator, and most recently, as a private sector consultant.
“These factors combined make him an ideal chairman of a development finance institution,” Mr. Bush said.
New board members include bankers Julie Hunter and Noel Williams, businessman Harvey Stephenson, accountant Matthews Adam and ex-officio member Gloria Myles, from the Portfolio of Finance and Economics.
Pullout: Small businesses that qualify for the program will be able to use the loans to pay off debts, cover operating costs and to purchase new capital equipment. Individuals who are at risk of home foreclosure or who are suffering ‘other financial distress’ will also be eligible for the loans, as will homeowners wanting to buy hurricane shutters or pay insurance premiums.