Improved Access to Microfinance by MSMEs

A project to support the improvement of access to finance for micro, small and medium-sized enterprises (MSME) has been given a budgetary allocation of $822 million to continue in the upcoming fiscal year.

Details of the undertaking are contained in the 2024/25 Estimates of Expenditure, now before the House of Representatives.

The project, which is being implemented by the Development Bank of Jamaica (DBJ) with funding from the International Bank for Reconstruction and Development (IBRD), began in 2018 and is slated to end in January 2025.

It involves four components – improving the Credit Enhancement Facility (CEF), which provides partial guarantees for MSMEs loans; supporting a small and medium-sized enterprises (SME) Fund for risk capital financing to SMEs; improving the enabling environment for access to finance and business development service for MSMEs; and project management.

Up to December 2023, achievements under the project included the injection of US$5.5 million into the CEF, completing the legal requirements to finalise the establishment and launch of the SME Fund and supporting 10 SMEs in getting access to risk capital through the Fund, implementation of an interactive technological platform to access vouchers for technical assistance, and the implementation of a reverse factoring platform to provide MSMEs with access to payables financing.

This is in addition to the development of a risk management system for the DBJ, implementation of a marketing and awareness-raising programme, and development and implementation of an environmental and social safeguards mechanism and a grievance redress system.

For 2024/25, it is anticipated that US$5 million will be injected into the SME Fund on behalf of the DBJ and an additional five SMEs enabled in accessing risk capital through the Fund.