Imbert rolls out $300m for SMEs

Finance Minister Colm Imbert on Saturday gave an assurance that Government will do as much as it can, financial wise, to keep businesses open and people employed.

During the virtual press conference on covid19, Imbert said Government would make $300 million available to small and medium-sized enterprises (SMEs) with an annual turnover between $1 million and $20 million.

There would be a 75 per cent government guarantee on the loan, and Government would pay all the interest on loans of $75,000 to $325,000, and businesses were not expected to make any payments for the first two years.

Any business earning less than $1 million will be able to receive a grant. While the details were still being finalised, he said $30 million was being made available for that aspect of the programme.

It would be operated through First Citizens Bank (FCB) in collaboration with Republic Bank, but, he said, Scotiabank and RBC expressed their willingness to join the programme.

“The SME loan programme will kick off next week. I am told by FCB that they expect to process the first loan by Tuesday of next week and that this is expected to move very very swiftly.”

For credit unions, $100 million was made available for individual loans up to $15,000 for three months at “very attractive” rates. He said “virtually all” credit unions signed a liquidity support loan agreement with the Ministry of Finance and will start providing loans to credit union members whose normal income were affected as a result of the covid19 pandemic.

Government also made another $100 million available to credit unions for small businesses. “They are currently working out the details and they will come back to us very shortly on how they plan to disburse these loans.”

On the issue of taxes and tax refunds, Imbert said so far in 2020 government issued $1.7 billion in tax refunds. The first set of VAT refunds were issued in the form of VAT bonds valued at $1 billion. Individual income tax, VAT, and corporation tax refunds were also paid at $700 million in cash.

He said Cabinet approved the second set of refunds to the amount of $2 billion which should be issued within the next three weeks.

However, he said there would be no revision or deferral of taxes because without taxes, the government would not be able to provide covid19 support. Previously, TT Chamber of Industry and Commerce CEO, Gabriel Faria, said Government was placing a stranglehold on businesses by insisting they pay taxes based on last year's profits even as many were facing losses because of the covid19 pandemic.

To that Imbert said, “That request is unreasonable because, at the same time that we are being asked by the business community to differ the collection of taxes, we are also being asked by the business community to provide financial support. Now money doesn’t grow on trees and the said business community has also indicated that we should be careful about not borrowing too much money, be careful about not drawing too much money out of the Heritage Fund, so the money has to come from somewhere.”

Taxi and maxi taxi drivers were recipients of some of that support as $21 million were made available for fuel grants. While some have already received cheques, many applications were still being processed.

Contracts have also been awarded to “small stitchers” through Nipdec for the manufacture of 465,000 cloth face masks. At a price of $10 per mask it would cost Government $4.65 million. The masks would be given to various NGOs including FEEL, to distribute to the population free of charge.

Government also provided the Export Import Bank of TT with an additional US$25 million per month to deal with importation of essential foods, sanitary products, pharmaceuticals, PPE and other essential supplies for three months.

Imbert said the government had a successful bond offering earlier this week, which was initiated to raise US$500 million, and finalised sources of funding.

On Friday, he signed two loan agreements with the Andean Development Bank for US$100 million and US$50 million for financial support for covid19, which he expected TT to receive next week.

He recalled that the government gave $9.7 million to 67 religious organisations to assist “the poor and needy” in their communities. He said 34 organisations recorded having distributed 41,314 hampers.

For the month of April, 26,000 people received salary relief grants and so far 16,500 people received May’s payments although the ministry was still processing grants for May. In addition, 29,000 payments for Income Support grants were processed for those not in the National Insurance system.

On the topic of mortgages, he said the Housing Development Corporation originally agreed to defer payments for two months but he asked the board of the HDC to consider deferring for another three. He added that he would “see what can be done” about requesting the board of the TT Mortgage Finance to consider additional deferrals for mortgage payments.