Dept Management

OUR DEBT MANAGEMENT UNIT

The Debt Management Unit deals with the following: 
 
(a)Public Debt: Funds borrowed or taken-on by the Government of Jamaica (GOJ)

(b)Institutional Loans: Loans extended by GOJ to public bodies/parastatal bodies, for example Housing Association of Jamaica (HAJ)

(c)Personal Loans: Loans extended by GOJ to Public Officers

(d)Investment of the Treasury Deposits and the E-Learning Funds.

Our Debt Management Unit consists of two sections:
 
1The Public Debt Unit
2The Institutional and Personal Loans Unit
 

Public Debt. The administration of the Public Debt focuses on the maintenance of proper and comprehensive records for all debts of the Government. We service the Debt on behalf of the Ministry of Finance. Monthly and annual loan repayment projections are prepared and specific reports are provided for budgetary and other management decisions by the MOF&P and for inspection by the Auditor General.

The Public Debt represents the recognized liabilities of the government both locally and internationally and includes direct and contingent liabilities.

Direct Liabilities:  Central Government borrowings.

Contingent Liabilities: Loans guaranteed by Government on behalf of parastatal bodies

Impact on the Economy:

The Unit’s mandate is to service the debt in a timely and accurate manner.  The debt if serviced short/inaccurately or untimely could incur penalty costs to the Government of Jamaica.  It could also thwart the Government’s chances of receiving future loans which would have far reaching and negative effects on the development/growth and sustainability of the Country’s economy

Functions of the Public Debt Unit

  1. The Public Debt is organized into two main areas, namely Local and Foreign Debt Servicing.

Foreign Loans:
Multilateral Loans e.g. CDB, IDB, IBRD & ECU
Bilateral Loans - Country to Country loans
Suppliers Credit

Local Loans:

            Bench-Mark Investment Notes
            Institutional Loans
            Market Issues
            Guaranteed Loans

Statutes

The Public Debt is the first charge upon the assets of the Country. (The Jamaican Constitution section 120).
 
Borrowing is done on the authority of the following:

  • The Public Debt Management Act 2012
  • The Land Bond Act of 1955
  • The Debenture Act
  • The World Bank  (IBRD) Act
  • The OPEC Act etc.

Land Bonds

When Government purchases land from persons or organizations, Land Bond certificates are at times given in lieu of cash. Instructions are sent to the Accountant General’s Department to prepare and issue bond certificates to vendors. These instructions set out details of the property acquired, name and address of holders, rate of interest, and date of issue and denominations to be issued.
 
Land Bonds are issued in eleven (11) denominations, signed by the Accountant General and sent to the registered holders on receipt of the transfer of title to the Government.

Transferability of Bonds

Bonds are transferable between individuals and organizations.

           Institutional Loans:

These are on-lent loans and loans advanced from the Consolidated Fund under a guarantee arrangement.

            On-lent Loans:

Only the government may receive a loan from a multilateral or bilateral lending agency such as IDB.  Hence, when a particular local agency requires funding for a development project, the Government may receive such funding from a foreign lending agency and on-lend the proceeds to the particular local agency for the specific project.
 

Loans Advanced from the Consolidated Fund due to a Guarantee Arrangement:

The GOJ guarantees loans on behalf of local public bodies. Whenever these public bodies default on their obligations the GOJ via the Public Debt Unit services the defaulting entity’s debt until that entity once again becomes viable. When the entity is able to manage its affairs once again the GOJ may transform the sum paid on its behalf into an institutional loan.

Personal Loans:

An increasingly important aspect of the Accountant General’s function is the provision of several loan facilities to members of the Service. Personal loans are funded originally from the Consolidated Fund and reflows from repayment are used on a revolving basis to provide loan access to other officers.

There are seven types of personal loans:

  1. Motor Vehicle Loan
  2. Motor Vehicle Insurance Loan
  3. Motor Vehicle Repair Loan
  4. Salary Advance Loan
  5. Tertiary Assistance Loan
  6. Facility to Purchase Computer Loan
  7. Miscellaneous Loan

One, five, six, and seven (1, 5, 6, & 7) above are loans approved by the Ministry of Finance and Planning while two, three and four (2, 3, & 4) are approved within the Accountant General’s Department (AGD). The (AGD) disburses and manages all the loans.
 
The Personal loans are for Public Sector workers of the Central Government group with the exception of the sub-groups that have such a facility reserved for themselves only, for example the Nursing group.
 
The Tertiary Assistance Loan however is for all government’s Ministries, Departments and Agencies (MDAs) including statutory bodies. Loans cannot be processed until all arrears on any previous personal loans have been cleared.
 

Loans Approved by Ministry of Finance and Planning and their requirements:

Only service employees who are permanently appointed and designated as travelling officers can benefit from Motor Vehicle, Motor Vehicle Insurance and Motor Vehicle Repair loans. However, motor vehicle insurance loans are extended to other officers appointed to the Central Government Service, so long as they are the registered owner of a motor vehicle. Officers eligible for a Motor Vehicle, Motor Vehicle Insurance, and Motor Vehicle Repair loans must apply to the Ministry of Finance and Planning through their respective Human Resource Department using the appropriate form designed by Ministry of Finance and Planning.
 

Motor Vehicle Loans.

 
Applications are made to the Loans Unit at the Ministry of Finance. Once approved, instructions are sent to the Accountant General and disbursements are made subject to funds availability and the following guidelines.
 

The Guidelines for a motor vehicle loan are:

  1. Certificate of Fitness
  2. Certificate of Registration
  3. C87 Import Entry Form or
  4. Vendor’s invoice (bearing GCT number)
  5. Cover note/ Insurance Certificate
  6. Driver’s license/TRN
  7. Proof of address for applicant and surety e.g. (electricity  or water bill)
  8. Two sureties who should be appointed in the Service for at least ten years
  9. Picture identification for sureties ( passport, driver’s license, national ID)
  10. Receipt of deposit made to the dealer (where applicable)
  11. Title and Discharge of Lien (where applicable)
  12. Banking information (where necessary)

Additionally, motor vehicles being acquired must not be more than five years old. The surety forms must be accompanied by surety’s appointment letter and a certified picture identification of each surety. The surety forms must be completed in triplicate.
 
Repayment period for motor vehicle loans.
 
Loans granted to acquire new vehicles are repayable over 108 months while those for used vehicles are repayable over 84 months.
 
Interest payable on Motor vehicle loans.
 
All motor vehicle loans are interest free; however the loan attracts 8% per annum interest under the following condition:
 
When the officer leaves Central Government (resignation/dismissal) the loan starts attracting interest at the date of separation.
 
Maximum lent for motor vehicle loans.
 
A maximum of J$1,100,000 will be lent for the acquisition of new vehicles while a maximum of $800,000.00 will be lent for the acquisition of used vehicles.
 

Motor Vehicle Insurance Loan

A permanently appointed Central Government employee is eligible for a loan to assist with the payment of Motor Vehicle Insurance Premium.
 
The Accountant General operates three types of Insurance Loan Schemes.
a.A discretionary loan where officers on whose Motor Vehicle the Accountant General’s Department holds a lien, are entitled to a maximum of $ 20,000.00
b.Members of the Jamaica Civil Service Association who are insured with Covenant Insurance Brokers Limited are eligible to receive a loan for 80% of the cost of the premium not exceeding $50,000.00
c.A discretionary loan where officers on whose Motor Vehicle the Accountant General’s Department  does not hold a lien are eligible for a maximum amount $ 10,000.00 with sureties.
 
Loan applications are made through the applicant’s Human Resource Department and then submitted to the Accountant General’s Department with supporting documents for approval.
 
The application for Motor Vehicle Insurance loan must be submitted at least two (2) weeks before the expiry date of last insurance.
 

Repayment for Insurance Loans 

The loan is repayable within a twelve (12) months period as it relates to option (a) and (b) and a nine (9) months period for option (c) above.
 
Loan attracts a 5% per annum interest on reducing balance and is payable every quarter.

Documents Required by AGD for Insurance Loans Approval
 
The original of the following must be submitted by the applicant:
 
1.Proof of Address for Applicant and Surety e.g. (electricity  or water bill
2.Picture identification for Sureties ( Passport, Driver’s Licence, National ID)
3.Two (2) Surety forms stamped at the Stamp Office and signed by a Justice of the Peace ( where applicable)
4.Appointment letters for Sureties (where applicable)
5.Certificate of Fitness
6.Certificate of Registration
7.Invoice/Renewal Notice
8.JCSA membership verification letter
9.Cover letter from respective MDA
10.Application letter/memo from applicant
 

The Tertiary Assistance Loan Facility

The Tertiary Assistance loan facility attracts interest at the rate of 5% per annum calculated on the reducing balance method. The maximum loan term given is 3 years.
 

Tertiary Assistance Loan

  • The Tertiary Assistance Loan was negotiated between the Labor Unions representing public sector employees and the government of Jamaica. The facility was established in 2006.
  • Application for this loan is done through the Human Resource or Training Unit of the respective ministry or department.

Tertiary Assistance Loan requirement:

 
In order to benefit from this facility applicants must be permanently appointed in the public service for at least 1 year or have 2 consecutive years of service on a temporary assignment. Additionally, applicants should have two sureties who have been permanently appointed for not less than four (4) years.
 
The Ministry of Finance determines the amount to be approved.

Documentation required for Tertiary Assistance

  • Letter of acceptance from the Institution
  • Transcript ( if applicant is a returning student)
  • Letter requesting the Tertiary Assistance Loan

Miscellaneous Loan

The Miscellaneous Loan is accessible for:

  • Emergencies (funerals, medical)
  • Home repairs (e.g. roofing)
  • Purchasing of appliances (refrigerators and stoves)

Eligibility
To be eligible for a miscellaneous loan an officer should be appointed and should have served a probationary period of 6 months in the public service. Additionally; the applicant must have two sureties who have been permanently appointed for not less than 1 year in the service.
 
The Ministry of Finance determines the amount to be approved

Documentation required for Miscellaneous Loans

  • Letter requesting the Miscellaneous stating the purpose of the loan
  • Invoices (proforma invoices, estimates for repairs, copy of the title property)
  • Application for this loan is done through the Human Resource or Training Unit of the respective ministry department or agency.

This loan attracts 5% per annum interest on a reducing balance payable every quarter.

Computer Loan

This facility assists public officers in the purchase of computers. To be eligible for this assistance, the officer should be appointed and have served their probation period of 6 months in the public service. Additionally, the officer should have two sureties who have been permanently appointed for not less than 1 year.
 
The Ministry of Finance determines the amount to be approved.

Documentation required for Computer Loans

  • Letter requesting the Computer Loan stating the purpose of the loan
  • Pro forma Invoices.
  • Application for this loan is done through the Human Resource or Training Unit of the respective ministry department or agency.

This loan attracts 5% per annum interest on a reducing balance payable every quarter

Salary Advance Loans

A permanently appointed Central Government Employee is eligible for a loan equivalent to one month’s basic salary to assist with:

  • Medical Expenses
  • Funeral Expenses
  • Unforeseen Emergencies discussed with and at the discretion of the Accountant General or Deputy Accountant General

Loan applications are made through the applicant’s Human Resource Department and then submitted to the Accountant General’s Department with supporting documents (medical bills, burial order, etc) for approval.
 

Repayment for Salary Advance Loan

 
The loan is repayable within a twelve (12) months period and attracts 5% per annum interest on a reducing balance payable every quarter.
 

Documents Required by AGD for Salary Advance Loans

 
The original of the following must be submitted by the applicant:
1.Proof of address for applicant and surety ( electricity bill, water bill)
2.Picture Identification for applicant and sureties ( passport, driver’s license, national ID)
3.Two surety forms stamped at the Stamp Office and signed by a Justice of the Peace
4.Appointment letters for sureties who must have at least two years of appointed service
5.Three (3) last pay slip for applicant.
 

Investment of Treasury Deposits and the E-Learning Funds

 
Treasury Deposits and the E-Learning Funds are authorized to be invested only in Reverse Repurchase Agreement.
 
A repurchase agreement, also known as a repo, RP, or sale and repurchase agreement, is the sale of securities together with an agreement for the seller to buy back the securities at a later date. The repurchase price is greater than the original sale price, the difference effectively representing interest, sometimes called the repo rate.
 
When viewed from the perspective of the supplier of the funds: the supplier of funds or investor or the lender (AGD) buys Government securities from a dealer in Government securities (or the borrower or the seller) with the contract agreement that the dealer will repurchase the securities at a specific date in the future at a higher price.
 

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