ADDRESS BY HON MICHAEL STERN, MINISTER OF STATE, INDUSTRY, INVESTMENT AND COMMERCE. OFFICIAL LAUNCH OF NATIONAL GROWTH MICRO FINANCE LIMITED

I consider it a distinct pleasure to share this occasion with you. The launch of this initiative is a welcome support for the micro enterprise sector and the availability of some $220 million dollars is a significant boost to the pool of funds.
The Micro and Small Enterprise sector which the government recognises as an important strategy in building the economy, generating employment and addressing poverty. We believe that Micro and small enterprises are also crucial to the Jamaican economy because of their role in the production and distribution of goods and services and in the enhancement of innovation, productivity and economic competitiveness.
The increasing importance of Micro and Small Enterprises stands out as a major source of income for women and young entrepreneurs. Many of these individuals start out by “trying a thing” and have through hard work and determination, grown their businesses and today have emerged as successful entrepreneurs in their own right.
Although the full contribution of informal businesses is not fully accounted for, informed estimates tell us that the sector contributes up to forty percent of the country’s total income.
One of the challenges to national development is ensuring that these enterprising men, women and young people are brought into the economic mainstream. When a small business becomes formalized, the owners of that business can benefit from training, technical support, soft loans, marketing and promotional programmes and the various government and non-government assistance that can grow the business and increase its profits.
As you may be aware,, the Government has increased its emphasis on the economic importance of micro and small enterprises predominantly as a major source of employment in Jamaica. The government, often in partnership with private sector and development agencies is seeking to redress particular difficulties faced by the MSE sector by offering benefits through new and existing support schemes.
The primary measures to achieve the broad development objective for the sector were improved access to credit and increased business development services. These measures are being conducted through the Private Sector Development Programme (PSDP), the euro28.7 million technical assistance programme funded by the European Union which started in 2005. The programme is geared at enhancing the competitiveness of firms, as well as strengthening their support and representative organizations.
Importantly also, is the number of entities which offered financial services to the sector increased while some existing institutions offered additional services for example, the NCB SME Financial Services launched the NCB Business Grow loan facility. Some institutions continued to receive support from international development partners such as the United States Agency for International Development (USAID), Inter-American Development Bank (IDB), Canadian International Development Agency (CIDA), and the European Union (EU).
Data from the Employed Labour Force by Employment Status for 2006 showed that, the Own Account (sole traders) category, which constitutes the vast majority of MSEs accounted for approximately 34.0 per cent (367 500 persons) of the total employed labour force. Wholesaling and Retailing employed approximately 24.0 per cent of the labour force.
Access to financing has been identified as a major constraint to the growth of the sector. In partnership with the government, a number of the institutions are involved in providing affordable credit to small and micro businesses. These institutions include the Jamaica National Micro Credit Limited, the Credit Unions, Development Bank of Jamaica, Scotia Bank Micro Enterprise Financing Limited, Access Financial Services, EX-IM Bank and MIDA.
For fiscal year 2008/09, projections indicate that just over $3.8 billion will be available to the SME sector.
Government has undertaken the establishment of business incubators intended to enhance entrepreneurial activities within the small and micro enterprise sector.
The project proposes the establishment of small business incubators for the nurturing of existing micro enterprises and potential start-ups and the establishment of community-based production centres. Government will provide a range of support through its various agencies in the establishment of the incubators.
The overall goal of the project is to facilitate the creation of sustainable employment opportunities for the target beneficiaries. The target businesses under the project comprise existing micro enterprises and start-up businesses with good potential for success. In particular, the programme will pay special attention to trained young existing or potential entrepreneurs who lack capital and/or collateral.
The main beneficiaries include new and emerging micro and small enterprises that are already actively seeking to provide needed commodities (products, processes or services) for which a market exists. These include activities that can be made viable and profitable by the injection of various resources and assistance including access to operating capital; access to non-cash lines of credit; subsidized rent; common services that reduce overhead and variable costs; and on site management counselling.
The Jamaica Business Development Centre has been mandated to lead the Government’s initiative to facilitate the sustainable development of the Micro and Small Enterprises in Jamaica. The company’s mandate is being implemented by experts in design, product development, engineering, business development, business analysis and research.
The JBDC also operates as a national network broker and facilitates clients, especially “start-up” businesses, to make efficient links with both government and private sector agencies.
It is evident that a new day has dawned for the facilitation of micro and small enterprises in this country. The entry of this new company into the business of micro financing and business facilitation will give momentum to our efforts. The unique features of your programme which includes business mentorship and support with respect to targeting niche markets are most welcome and on behalf of the potential beneficiaries I say a big thank you.