JNSBL Gets $250 Million to On-Lend to Small Businesses

Jamaica National Small Business Loans Limited (JNSBL) has received $250 million from the Development Bank of Jamaica(DBJ) to on-lend to micro and small businesses.
This is part of the Government’s stimulus package to assist the sector in the current financial crisis. The first tranche of $125 million was received on Wednesday (February 18).
JNBS manager, Frank Whylie, made the disclosure in an interview with JIS News today(Feb 19). He said the funds could not have come at a better time, as several clients have graduated from micro to small, and now required larger loans in order to expand their business.
“A lot of our micro clients have graduated from being micro businesses to small business, and all of them need more capital. So now that we have received this new money, we will be able to finance them”, said Mr. Whylie.
“We are putting things in place to start lending the money,” he added.
In preparation for lending the funds, Mr. Whilie said that the JNSBL was looking at the number of loans officers which it will need to ensure that there is adequate personnel, in light of its huge huge pipeline.
“The pipeline is bigger than $2 billion, considering that last year we lent out $1.8 billion. In the current financial crisis, people are going to demand loan funds to start a business or expand an existing one. So, given the availability of funds, we may well be doing $2.8 billion in loans next year”.
He explained that while the criteria for graduation vary, when a client needs exceed $500,000 it is usually when the graduation takes place.
He pointed out, however, that the ability to find collateral to support a larger loan has remained a constraint.
The JNSBL portfolio consists of 16,000 micro clients and 50 small clients. The maximum loan size for micro clients is $300,000, and they are charged interest at the rate of one per cent per week and given 20 weeks to repay the loan.
The new scheme for small businesses has already attracted 50 clients. They are charged 10% interest per year on the reducing balance, and are given three years to repay the loan.
The loans provided by JNSBL are in several areas, including wholesale, retail, manufacturing, agriculture, fishing, and services.