- In addition to creating an enabling business environment, Prime Minister Portia Simpson Miller says Government is determined to continue increasing access to financing for the micro and small business sector.
- The Prime Minister indicated that there has been an increase in the loans provided to small businesses.
- The Development Bank of Jamaica (DBJ), the Government’s main vehicle for providing financing to the sector, lent approximately $1.3 Billion to the micro and small business sector in 2014.
In addition to creating an enabling business environment, Prime Minister Portia Simpson Miller says Government is determined to continue increasing access to financing for the micro and small business sector. Delivering the keynote address at the Small Business Association of Jamaica’s 40th Anniversary Banquet on Saturday, November 28 at the Jamaica Pegasus Hotel in Kingston, the Prime Minister indicated that there has been an increase in the loans provided to small businesses. “The Planning Institute of Jamaica reports that, based on their surveys, last year, there was growth in loans disbursed to micro and small enterprises. This was in terms of both the volume and value of loans,” the Prime Minister outlined.
The Development Bank of Jamaica (DBJ), the Government’s main vehicle for providing financing to the sector, lent approximately $1.3 Billion to the micro and small business sector in 2014. This represented a 14% increase over the – amount provided in 2013. For the financial year 2013/2014, the DBJ provided $2.3 Billion in loans for micro, small and medium businesses. A total of 1000 of these loans were disbursed through Micro Finance Institutions.
Some of the DBJ’s loan facilities include: The Small and Medium-sized Enterprises Development Line of Credit; The Fishermen’s Revolving Loan Scheme; The Modernization of Agriculture and Agro-Processing Facility; and The Combined Disabilities Association Limited Special Line of Credit; among others. The Prime Minister also pointed to other public sector entities that continue to provide funding to small businesses. These include the Micro Investment Development Agency (MIDA) which provided more than $150 Million to micro, small and medium businesses last year.
Despite the increase in funding made available to the micro and small business sector, the Prime Minister acknowledged that there are concerns regarding the rates at which financial institutions on-lend DBJ funds. She assured that the DBJ and the Ministry of Investment and Commerce are giving attention to these issues.
Mrs. Simpson Miller also made the point that the sustainability of small businesses is linked to their ability to attract long term, stable, venture-capital financing and advised that a review of this situation led her Administration to address the gaps that existed, hence the creation of the Jamaica Venture Capital Programme. “The Jamaica Venture Capital Programme was created in 2013 and located in the DBJ. Technical assistance and financial support was provided by the Inter-American Development Bank,” the Prime Minister said. Building on that programme, Mrs. Simpson Miller noted that the DBJ launched a new 2-year venture capital pilot programme called Innovation Grant from New Ideas to Entrepreneurship (IGNITE). “The objective of IGNITE is to support the creation and growth of new innovative firms in productive sectors. Funding is awarded to businesses based on an application system,” she said. Grant funding will be provided to successful applicants and the ventures will be monitored for 2 years. The grants will support innovation activities to stimulate growth of 30 new businesses in strategic sectors.
Signaling her Government’s commitment to the development of the MSME sector, Mrs. Simpson Miller also pointed out that her Administration has enacted some of the most far-reaching legislations in support of small businesses. “These legislative reforms; and the MSME and Entrepreneurship Policy of 2013, are practical actions by the Government to build the capacity of the sector,” the Prime Minister said. “These actions have sought to address some of the major challenges that you face as small business owners,” she told the group of entrepreneurs.
Micro, Small and Medium sized businesses account for nearly 80 percent of all employment in Jamaica. In 2014, sole traders, who comprise the majority of micro and small enterprises, accounted for more than 36 percent of the employed labour force.