DBJ Continues to Support MSMEs

Managing Director of the Development Bank of Jamaica (DBJ), Milverton Reynolds, continues to underscore the importance of micro, small and medium-sized enterprises (MSMEs) to the country’s growth, and the entity’s commitment to their ongoing development.

Noting MSMEs’ significance in the growth of the global economy, he argues that this is “no less so, here in Jamaica”.

He was speaking at the DBJ’s 2017 SME Summit, which was held at The Knutsford Court Hotel in New Kingston on Tuesday, November 7 under the theme ‘Empowering for Success: Talk, Connect, Grow’.

“Small businesses help in the areas of job creation, wealth creation and (through) the harnessing of their creative talents, innovation and product development, provide the necessary boost to drive economic growth,” Mr Reynolds said.

He noted that over the years, the DBJ’s strong focus on the MSME sector has seen the entity collaborating with various local and international partners to provide services tailored for that group.

This, he said, saw the DBJ approving more than $6.4 billion in loans for MSMEs during the 2016/17 fiscal year.

The Managing Director pointed out that the entity also disbursed some $50 million in grants and technical assistance support to approximately 300 MSMEs during the period as part of its ongoing programme of capacity building and institutional strengthening.

Additionally, he said equity investments by the DBJ in fund managers investing in MSMEs amounted to US$2.25 million. This, he noted, helped to mobilise some US$40 million of investments in growth-oriented entities.

Meanwhile, Mr. Reynolds said the DBJ remains focused on developing new products and introducing additional initiatives and programmes designed to further strengthen the sector.

Among these, he noted, is the Foundation for Competitiveness and Growth Facilitation Programme, which sees the DBJ partnering with several stakeholders to support and foster engagements valued at $2 billion in local investments.

These include the Ministry of Finance and the Public Service, Jamaica Promotions Corporation (JAMPRO), the Planning Institute of Jamaica, National Environment and Planning Agency, and commercial banks as well as various suppliers and service providers.

Mr. Reynolds pointed out that the World Bank-supported programme is designed to improve competitiveness, productivity and overall business growth, adding that the average loan has longer repayment periods, which is intended to make the facility more sustainable.

The Managing Director also highlighted the Credit Enhancement Facility, which provides collateral support for entities unable to meet this criterion for loans.

He indicated that, to date, the DBJ has provided more than $1.6 billion in guarantees, which has enabled 375 small businesses to access $3.6 billion in loans through 14 of the entity’s partner approved financial institutions (AFIs).

An initiative that Mr. Reynolds said the DBJ is embarking on is the Financial Inclusion Project, which, he explained, sees the Bank conducting a series of seminars and workshops islandwide.

These, he said, are designed to heighten MSME stakeholders’ understanding and appreciation of the importance of “good financial choices” while improving their overall competitiveness, adding that “through this programme, we aim to reach some 2,500 MSMEs”.

Mr. Reynolds also cited the World Bank-endorsed Access to Finance Project, which will enable the DBJ to access some US$15 million to facilitate the expansion of initiatives such as the Voucher for Technical Assistance (VTA) programme.

Under the VTA, the DBJ covers 70 per cent of the cost of 27 specific services with vouchers ranging in value from $50,000 to $500,000. These services are designed to improve MSMEs’ management capacity as well as their ability to access credit from AFIs.

Meanwhile, Mr, Reynolds advised that among other initiatives being developed for implementation are the ‘Go-24’ programme, which will see the DBJ working with its AFIs to provide loans of up to $6.25 million to applicants within 24 hours, with the Bank guaranteeing up to 80 per cent of the sum.

He further said the DBJ is currently conducting research on asset-based financing to assist MSMEs experiencing liquidity challenges, and is also pursuing the establishment of climate-adaptation projects designed to strengthen entities’ resilience to natural disasters and weather-related events.

“We at the DBJ live by our mission – to facilitate economic growth and development for all Jamaicans… and this we (have done) and will continue to do through a multiplicity of strategies and programmes, extended over the short, medium and long term,” Mr. Reynolds added.