DBJ Reaffirms Commitment to MSMEs

KINGSTON — The Development Bank of Jamaica (DBJ) has re-affirmed its commitment to working with stakeholders in micro, small and medium-sized enterprises (MSMEs), to develop and consolidate that sector’s position within the economy.

This is being done through the allocation of some $7.5 million in grant funding to the Business Entrepreneurial Empowerment Programme (BEEP), among other things.

A joint initiative involving the DBJ, Institute of Law and Economics (ILE) and the MSME Alliance, BEEP is a research driven programme aimed at providing basic entrepreneurial training and related support services to MSMEs. This will enable them to achieve minimum business competencies in areas such as: business planning, management and marketing; financial literacy; networking; and legal compliance and taxation, among other areas. Over 500 stakeholders have benefitted under BEEP, since its inception in December, 2010.

DBJ Chairman, Joseph M. Matalon, and Managing Director, Milverton Reynolds, re-affirmed the institution’s commitment, while addressing a special luncheon jointly hosted by the Bank, ILE and the MSME Alliance, for BEEP participants at the Jamaica Pegasus Hotel, New Kingston, on Tuesday (October 4).

Mr. Matalon said the shift in the DBJ’s focus to MSME development resulted from a strategic review of its role and mandate in the economy, which the institution conducted some three years ago. Arising from this review, the need for the Bank to change its focus from solely  largescale investment projects and “the normal routine DBJ regular lending activities”, to greater emphasis on the development of the MSME sector, was identified.

Consequent on this, Mr. Matalon said the DBJ introduced several initiatives, including the establishment of a wholesale lending window for the micro-finance industry, with the Bank being designated by the government as the lead agency for interventions in the micro-finance industry, as well as special lines of credit, specifically designed to meet the needs of small and medium sized enterprises.

“We have also, in the course of last year, established a $250 million credit enhancement facility, which provides partial guarantees,…(of) up to 50 per cent of the value of loans made to MSMEs as defined, and which can aid the commercial banks in lending to otherwise well qualified borrowers, who don’t necessarily have a sufficiency of collateral under the  requirements that the commercial banks insist upon,” he added.

The DBJ Chairman said the institution has been involved in promoting the introduction of the ‘mobile money” concept, consistent with efforts at reducing the costs of doing business, particularly in the micro-finance industry, which can see rates coming down as a result of taking costs out of their operations.

He said the DBJ has also been involved with a significant capacity building programme, with the island’s network of People’s Cooperative (PC) Banks, and has commenced work on Jamaica’s Venture Capital Programme. The Venture Capital Programme, he explained, will provide a framework for, and facilitate the development of a venture capital industry that can facilitate the requirements of small businesses.

He said, however, that based on DBJ surveys, the single greatest challenge facing MSME stakeholders, particularly relating to credit access, were issues of marketing, maintaining records and “general principles of governance”. 

“So, this BEEP, as a part of the suite of technical cooperation agreements that we have entered into with a number of parties to promote the development of MSMEs, fits very neatly within our mandate,” he stated.

Mr. Matalon said the DBJ was delighted to have been a part of the programme, and looked forward to deepening its partnership with the ILE and the MSME Alliance, to further their mutual objective to empower and mobilize the entrepreneurial spirit and talents of the MSME sectors.

In his remarks, Mr. Reynolds cited the strategic positioning of the MSME stakeholders as an imperative to job creation and economic development, hence the DBJ’s  interest in BEEP.

“To date, we have made grant funding available to the tune of some $7.4 million, which we have made available for the assistance of this programme,” Mr. Reynolds said, while expressing satisfaction with programme’s “tremendous success” to date.

By Douglas Mcintosh, JIS Reporter