- Minister of Finance and the Public Service, Hon. Audley Shaw, is urging commercial banks to find innovative ways to improve access to financing in order to aid in advancing the country’s growth agenda.
- “Let’s expedite the application process and let us resist the temptation to offer high interest, intermediary lows...,” Mr. Shaw said.
- The Minister said the Government has taken proactive approaches in the development of non-traditional methods of financing MSMEs to meet long-term funding needs of the sector, particularly through the DBJ’s development of alternative credit lines.
Minister of Finance and the Public Service, Hon. Audley Shaw, is urging commercial banks to find innovative ways to improve access to financing in order to aid in advancing the country’s growth agenda.
He said this should include “taking firm and decisive steps” to provide low-interest loans to micro, small and medium-sized enterprises (MSMEs) in the productive sector of the society.
“Let’s expedite the application process and let us resist the temptation to offer high interest, intermediary lows…,” Mr. Shaw said.
He was addressing a consultation to discuss the Development Bank of Jamaica (DBJ)/World Bank Environmental and Social Management Framework Policy, at The Jamaica Pegasus hotel today (March 15).
The Minister made the comments as he commended last year’s approval of the DBJ as a lending agency, by the Bank of Jamaica, under the Banking Services Act. This has allowed for a reduction in the risk weighting for commercial bank loans guaranteed by DBJ’s Credit Enhancement Fund, from 100 per cent to 20 per cent.
Mr. Shaw said this adjustment will significantly improve access to credit for MSMEs. The DBJ estimates that an additional $6 billion will be available for lending to the sector through the commercial banks as a result of the initiative.
The Minister said the Government has taken proactive approaches in the development of non-traditional methods of financing MSMEs to meet long-term funding needs of the sector, particularly through the DBJ’s development of alternative credit lines.
“The importance of financial institutions facilitating access to finance can’t be overstressed. Attracting, developing and supporting the MSME sector is such an important component of Jamaica’s economic strategy. It has the ability to create jobs and innovations which can take the economy much further than where we are now,” Mr. Shaw pointed out.
He said the Government is committed to providing the MSME sector with expert guidance and a comprehensive network of resources to aid in its development, including access to equity and debt capital as well as a supportive regulative framework and tax culture.
Minister without Portfolio in the Ministry of Economic Growth and Job Creation, Hon. Daryl Vaz, in the meantime called on financial institutions to recognise the enormous growth potential of the green economy as well as its impact on Jamaica.
He said it is critical that institutions provide the investment needed and develop new finance products that will encourage sustainable development.
“As businesses become more energy-efficient, and as the supply of local renewable energy grows, energy demand falls and energy importation along with it. With reduced overheads from energy costs, businesses become more competitive and can reinvest their savings,” Mr. Vaz said.
The Environmental and Social Management Framework (ESMF) is an aspect of the World Bank-funded Access to Finance Project and the Foundations for Competitiveness and Growth Project (FCGP) by the DBJ.
ESMF is an instrument used to identify appropriate methods and tools to assess and manage the potential environmental and social risks and impacts of programmes funded under the two projects.
The Access to Finance Project, a US$20-million initiative, will be executed over a period of five years with the objective of improving access to finance for MSMEs and housing finance for the low-income segments of the Jamaican population.
The FCGP provides financial support to small and medium-sized enterprises by working with a lead firm in a supply chain to implement projects that will make the supply chains more competitive.