KINGSTON, Jamaica—The Small Business Association of Jamaica (SBAJ) is calling for urgent government intervention after commercial banks failed to adjust their lending rates following consecutive reductions in the Bank of Jamaica’s (BOJ) policy interest rate.
The BOJ announced its fourth rate cut for 2024, reducing the policy rate to 6% per annum, effective December 23, 2024. The move is part of the central bank’s strategy to lower borrowing costs and stimulate economic growth. However, according to the SBAJ, the intended benefits of these measures are being obstructed by banks that continue to charge high interest rates on loans, leaving small businesses and individuals grappling with financial strain.
“This is a crisis that needs immediate attention,” said Garnett Reid, President of the SBAJ. “The BOJ has created the tools for economic growth, but the commercial banks are choosing profits over people, leaving small businesses suffocated by unreasonably high-interest rates.”
Small Businesses on the Brink
The SBAJ highlighted that many of its members are still burdened with interest rates as high as 15-18% on loans, despite the BOJ’s significant policy adjustments. The association described the banks’ actions as a deliberate move that undermines national economic recovery efforts.
“These businesses are the lifeblood of the Jamaican economy,” said Michael Lecky, former SBAJ President. “When banks refuse to lower lending rates, they’re not just hurting small businesses—they’re sabotaging economic stability.”
The Role of Transparency and Accountability
The SBAJ also criticized the Bank Association of Jamaica (BAJ) for its silence on the issue, urging greater transparency and alignment with the BOJ’s monetary policies. The association called for increased oversight to ensure financial institutions act in the best interest of the broader economy.
“Banks have a duty to support national growth initiatives, not to operate in ways that stifle progress,” Reid argued. “The government must step in to enforce compliance and ensure that the BOJ’s policies are not rendered ineffective.”
Calls for Government Action
The SBAJ is advocating for stronger regulatory measures to address the ongoing issue. It has proposed the implementation of monitoring mechanisms to ensure that lending rates reflect BOJ policies and benefit the wider population.
“If this is not resolved quickly, we risk losing the backbone of our economy. Small businesses cannot thrive in an environment where financial institutions prioritize profits over growth,” Reid warned.
The SBAJ emphasized that immediate action is crucial to prevent further damage to Jamaica’s small business sector and to sustain long-term economic recovery.
