Commercial banks offer forex support to SMEs

MINISTER OF FINANCE Colm Imbert said Government plans to open a special window for Small and Medium Enterprises (SMEs) to access foreign exchange (forex) with the help of Eximbank.

Speaking at a virtual press conference on Wednesday, Imbert said Eximbank had already supported several companies in accessing forex for imports.

“Up to June 2023 the Eximbank has successfully supported 96 importers with US$746m and we are continuing,” he said. “We are going to expand these programmes. I mentioned that the plan to open a special window at Eximbank for small and medium enterprises (SMEs) because we recognise they are at the end of the scale.”

He said commercial banks had also asked if instructions the Central Bank gave could be changed so the banks could open up special windows for SMEs as well. He added, while it might not be a permanent solution, it could provide businesses with forex relief as the Christmas season approached.

“If the commercial banks are willing to offer a special window, that is something we can do right away.”

At the reading of the budget on October 2, Imbert said Government planned to strengthen the foreign exchange market with the help of the Central Bank, commercial banks and the business community. He said government would set an agenda to identify the causes and effects of increased demand for forex and come up with strategies to deal with those challenges and establish policies for allocation, management and distribution.

One of the issues already identified was a significant increase in credit-card sales using forex which, because of SMEs using credit cards to purchase goods for business, was expected to reach to US$2 billion this year.

The ministry determined that sales of foreign exchange using credit cards for overseas transactions reached close to US$6m a day in September.

In September the ministry said it requested that Central Bank inject US$50 illion into the banking system in addition to the usual fortnightly injection.

The request came on the heels of an announcement by Republic Bank that it cut its limit from US$10,000 to US$5,000.

Imbert added that he asked Central Bank to investigate recent complaints of unauthorised deductions from credit cards. He said the Central Bank was the body responsible for looking into matters of that nature.

“The government doesn’t get involved. The regulatory body, which is Central Bank will investigate,” he said.

“I must tell you, when there was this confusion with PriceSmart, I did communicate with Central Bank and asked them to investigate.”

Last weekend, several customers complained of unknown and unauthorised transactions on their credit card accounts dated October 13 which came from PriceSmart sales. Minister of Trade Paula Gopee-Scoon on Monday said she also asked the Consumer Affairs Division to investigate, to ensure that customers were not “disadvantaged.”