Dashboard
LoginSign Up

Financial News

Google AdSenseNews Headernews_header
Government eyes policy fix for chronic payment delays
jamaicaobserver19d ago

Government eyes policy fix for chronic payment delays

THE Government is preparing to put a formal policy around receivables factoring, a move Finance Minister Fayval Williams says could ease long-standing payment delays faced by contractors and improve the flow of money through the economy.Speaking at the Jamaica Stock Exchange’s Regional Investments and Capital Markets Conference on Wednesday, Williams acknowledged that factoring is not a high-profile financial product, but said it represents a practical opportunity to remove bottlenecks that have constrained growth for years.“It doesn’t sound sexy but it allows financial intermediaries to lend against monies that are owed. And what I’m realising is that within Government we are going to need a policy, so our permanent secretaries and others feel comfortable utilising this,” she told the conference.Receivables factoring allows businesses to access cash by borrowing against invoices that are yet to be paid, rather than waiting 30, 60, 90 or even 120 days for settlement. For contractors working on public sector projects, those delays can affect working capital, slow execution, and limit the ability to take on new work — even when payment is ultimately assured.The minister said the constraint is not the absence of willing financiers but uncertainty within the public service about how factoring arrangements should be treated when government receivables are involved.“In those instances where Government owes money, or work is in process or completed, it takes a lot of energy for the contractor — calling, following up, trying to get paid. If we can create the right environment, instead of waiting months, they could have the money much sooner and put it back into other projects,” she said.The policy gap has left many contractors relying on overdrafts or short-term loans to bridge payment delays, absorbing financing costs that erode margins and strain balance sheets, particularly for small and mid-size firms.Williams’ remarks reflect a broader shift in how the Government is thinking about financial intermediation by focusing less on creating new funding pools, and more on removing friction points that prevent existing capital from circulating efficiently.Importantly, the minister did not frame factoring as a fiscal workaround or a substitute for timely payment, but as a structured financing tool that requires proper governance.“This will need rules,” she said, noting that policy clarity is essential for public officials to feel comfortable engaging with financial institutions on such transactions.Policy work on receivables factoring, she added, would help normalise the service as part of Jamaica’s financing landscape, rather than treating it as an exception or ad hoc solution.The private sector, meanwhile, has indicated it is ready to support the development of a clear framework.Responding during the conference, Angus Young, chief executive officer of NCB Capital Markets and executive vice-president for corporate and investment banking at NCB Jamaica Limited, said the institution would assist the Government as it works to formalise the rules.“We commit to the Government of Jamaica that we will make ourselves available, pro bono, our legal and policy framework surrounding the factoring of receivables product, make that available to the Government as you build on the framework,” Young said. He added that the institution would also work to broaden understanding and acceptance of the product.“And the second promise we will make is that we will make factoring sexy,” he said, drawing light laughter from the audience.

#ECONOMY
Google AdSenseNews Footernews_footer