Call once again for small businesses to access unclaimed billions in banks
As billions of unclaimed Jamaican dollars lie dormant in the country’s banks, Opposition Spokesman on Finance Julian Robinson wants the funds accessible to small and micro-businesses that are suffering under COVID-19 conditions.
Robinson, while addressing the Jamaica Chamber of Commerce virtually yesterday morning, outlined a raft of suggestions related to the economic recovery of the business sector.
One such recommendation is a loan with a moratorium of 18 to 24 months to put small and micro-business operators in a position where they can start to earn again. He pitted his suggestion against a report by the Small Business Association of Jamaica (SBAJ) that said that 30 per cent of its members were facing closure under the coronavirus pandemic and were in need of immediate support.
Robinson argued that Minister of Industry, Investment and Commerce Audley Shaw had already done a lot of work in the past on how to access the dormant funds in banks, noting that “it is absolutely legal. Once the money has been sitting down in the bank for over 15 years, is advertised for a year, and no one turns up to collect it, the Banking Act allows the money to revert to the Government”.
He said there was billions of Jamaican dollars that has remained unclaimed, and he wanted to know what was the hold-up from the Cabinet level.
Currently, low interest rate loans are available for micro and small business operators through entities such as the Development Bank of Jamaica (DBJ), but because some 40 per cent of the country’s businesses are informal, they have not been able to access same.
Those most affected include hairdressers, barbers, and pan chicken vendors, who were left out of the Government’s COVID-19 stimulus package but are the largest part of the economy, argues Robinson, as he addressed some 60 members of the business community.
He made reference to an established system that exists of industry players who provide loans to the informal sector at far higher interest rates than the regular financial institutions, which he said the Government could use as a model.
Robinson, however, wants some type of incentive to be put in place to bring informal business operators into the formal system. “They can’t be ignored because they are the largest part of the economy,” he told The Gleaner after his presentation.
Jamaica Chamber of Commerce President Lloyd Distant welcomed the recommendations, admitting that his association was anxious to identify more sources of funding for micro, small and medium enterprises (MSMEs).
“We would want more information on the availability of these funds and the process for accessing; however, key in all of this will be how we get this into the neediest hands while protecting the monies to be encumbered under this proposal,” Distant stated.
He added that the issues and challenges of readiness of MSMEs as well as the process for ensuring inclusivity and qualification have been problematic for years. “We need to ensure we have solutions for these challenging and vexing issues as we chart a path to recovery,” he noted.
BANKING SERVICES ACT
Section 126 ‘Unclaimed Moneys’ of the Banking Services Act states: “Whereby any annual return required by Section 82, it appears that any moneys have remained unclaimed in the possession or under the control of a deposit-taking institution for a period of 15 or more years, the minister shall cause a notice to be published in the Gazette and in a daily newspaper circulated in Jamaica.
“Giving full particulars of the moneys so unclaimed; stating the period during which the moneys have remained unclaimed and stating that unless, within one year from the date of the first publication of the notice in the Gazette and on the ministry responsible for finance, a claim of those moneys is established to the satisfaction of the deposit- taking institution.
“Upon the expiration of the year, any claim to the money shall lapse and become part of the revenues of Jamaica.”