This is to advise that with effect from January 1, 2005, service enterprises utilizing the Credit Guarantee Scheme for Small and Medium-sized Enterprises and/or the Export Credit Insurance & Guarantee Scheme are entitled to a reduction in the rate of premium charged for insurance and/or guarantee cover as follows:
Credit Guarantee Scheme for Small and Medium-sized Enterprises
A 66⅔% reduction in the rate of premium charged for loans guaranteed.
Export Finance Guarantees
A 50% reduction in the rate of premium charged for export loans guaranteed.
Export Credit Insurance
A 50% reduction in the rate of premium charged for services insured.
These reductions apply to the service enterprises only. Service enterprises currently covered under any of the abovementioned schemes should contact the relevant lending institutions or the Central Bank to ascertain the rate of premium applicable to them.
New applicants for cover will be entitled to the reduced rates of premium in respect of any insurance or guarantee cover obtained.
Service enterprises are those businesses whose principal activities are the sale/delivery of services to local and/or foreign buyers as opposed to the sale and/or delivery of tangible goods.
The reduction in premium rates is designed to encourage the services sector to venture into new service activities, especially for the export market, which are capable of generating additional employment and foreign exchange. This support measure, at minimum cost to the enterprise, should engender confidence and a stronger competitive spirit among service providers.
Wherever practicable commercial banks and other financial institutions with access to the Central Bank’s special financing schemes are encouraged to facilitate service providers who need financial assistance and/or security for the execution of their service contracts. This should provide an opportunity for them to grow and expand and ultimately to compete in the regional and/or global markets.