JIS News

Minister of Industry, Investment and Commerce, Karl Samuda, today (Nov. 12) said that the Government will be seeking to collapse the Self Start Fund (SSF) and the Micro Investment Development Agency (MIDA) and placing these services under the umbrella of the Jamaica Business Development Corporation (JBDC).
Speaking at the weekly post-Cabinet press briefing today (Nov.12) at Jamaica House, Mr. Samuda explained that, “we are seeking to establish a genuine one-stop facility for micro and small businesses, where we are planning to house all the activities that relate to these areas within the small business grouping, under the responsibility of the Jamaica Business Development Corporation”.
Noting the change from Centre to Corporation, the Minister further outlined that, “what we plan to do is to have that organisation deal with three fundamental elements that make up the support mechanism for the micro and small business sector. You will have on the one hand, training facilities, which we do through our incubator system; product development and marketing, which is now in place – but the new feature will be the establishment of a financial centre, under the umbrella of JBDC”.
In this regard, Mr. Samuda explained, he has “instructed the Permanent Secretary to obtain from the Attorney General’s Department, a ruling on how we could collapse the Self Start Fund (and) MIDA into an organisation that would then report under the Business Development Corporation, so that we will have a banking and financing unit that will deal with granting of loans to the micro and small business sector”.
Noting Cabinet’s approval of a $150 million fund to be managed by the JBDC as a pilot project, the Commerce Minister said: “with that $150 million, we are going to be structuring the JBDC in a manner to be able to manage it efficiently and to provide the kind of resources that are so badly needed in the micro and small business sector.”
He said the rules under which this fund would operate, would not be as rigid as those that obtain in the traditional banking community. He said that whilst the need for collateral would not be eliminated, this would be looked at in a more flexible way, with greater focus on elements relating to intellectual property, so that persons, who do not have any collateral but have good ideas and proven skills, can be “collateralised”.
Lamenting what he said has been the waste of capital through the SSF and MIDA in the past, Mr. Samuda stated that, “we are going to ensure that does not happen in the future. JBDC is going to be so highly structured, and the monitoring process will be so intense that we will be assured of much greater success”.
He pointed out that 80 per cent of small businesses fail because of lack of training, and that for each loan where there is training attached, there is a 60 per cent success rate. “What we have done in the past is throw money at the sector in the hope that by giving people money, giving them a break, they will go out and make that money multiply. It doesn’t work that way. They have to know the basic principles that guide a business and its operations, so in every loan, it is a part of the conditionalities that you have to undergo a training programme,” the Minister said.
Meanwhile, the SSF’s annual report for the financial year 2006/2007 was noted by Cabinet and is to be tabled in Parliament.

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