Government guarantees more cash for cheap loans

(CNS): Following the huge take up on the Cayman Islands Development Bank’s low cost loans to help struggling businesses through the recession, the government has sourced more cash to keep the programme going. First Caribbean Bank has stepped in to fund the programme with a loan of US$5 million to the CIDB at 3.2%, which will be guaranteed by the government. The premier and minister of finance brought the motion for approval of the guarantee to the Legislative Assembly on Monday to enable the Development Bank to meet loans which have already been approved and offer more new ones. (Left: CIDB chair Paul Byles)

The bank closed down the cheap loans, which were offered to business and home owners to help them through the recession and to stimulate the economy last August, after receiving over 273 requests for assistance, with more than CI$4 million being allocated to qualified individuals and businesses from June of 2009 when the stimulus loans were first offered.

The initiative, which included offering loans as low as 1%, ran for six weeks and Paul Byles, Chairman of the Development Bank Board, said at the time the bank would seek further funding to help with the current economic downturn.

McKeeva Bush told the house that $2 million worth of applications were waiting in the pipeline for money and the bank would, with the new loan guarantee, be able to fund those approved loans and offer new ones as well. He explained that the CIDB itself had only limited access to funds that it could lend, hence the need to seek outside funding for the scheme.

Bush said the government wished it could do more to help people but at least this money would enable the bank to save businesses and protect the homes of those who had been hit hard by the recession.