More Support for MSMEs

The Government and the World Bank, today (March 2), signed a US$15-million loan agreement that will provide greater financial support for micro, small and medium-sized enterprises (MSMEs).

Under the Access to Finance Project, US$5 million will go towards boosting the Credit Enhancement Facility for guarantees to MSME loans; US$5 million will be used to support the establishment of an SME Fund for risk capital financing to small and medium-sized enterprises (SMEs); while US$4.962 million will go towards improving the enabling environment for access to finance and business development services for MSMEs.

The project will be implemented by the Development Bank of Jamaica (DBJ) over a five-year period and will enhance the capacity of the bank in the delivery of the suite of options to improve access to finance for MSMEs.

The agreement was signed by Minister of Finance and the Public Service, Hon. Audley Shaw; and Country Manager, World Bank, Galina Sotirova, during a ceremony at the Ministry’s Heroes Circle offices in Kingston, on March 2.

In his remarks, Mr. Shaw said MSMEs represent 80 to 90 per cent of the economy and are recognised by the Government as key drivers in creating sustainable economic development over the medium- to long-term.

“The funding from the World Bank will further increase the pool of resources available to MSMEs through the Credit Enhancement Fund by the participating approved financing institutions,” he noted.

He said the access to finance project is expected to broaden the scope of financing options currently available to the sector, by the development of financial instruments specifically designed for MSMEs, as well as to provide recommendations to further improve the legal and regulatory framework supporting business development.

Mr. Shaw said the programme further highlights the Government’s commitment to economic growth through robust public/private partnerships.

“The Government greatly appreciates the continued support of the World Bank in partnering with Jamaica in the area of macroeconomic development, and we look forward to future partnerships,” he said.

For her part, Ms. Sotirova said the project will support more than 1,000 partial credit guarantees to enable the financial sector to provide loans to SMEs through an improved Credit Enhancement Facility.

She added that the project will also contribute to a stronger ecosystem for access to finance and to expand the provision of business development services for SMEs.

“It is worth noting that some activities under the project have already started, benefiting from the retroactive financing provided for under the agreement we’re signing today. This is evidence of the strong commitment to SME development, growth and job creation,” Ms. Sotirova said.

She pointed out that the World Bank Group and the Government have been strong partners, and that the Group has been supporting Jamaica’s growth and economic development for the last 55 years.

Meanwhile, Managing Director, Development Bank of Jamaica, Milverton Reynolds, said the multipronged venture is geared towards expanding and deepening the development of the country by providing opportunities for the private sector.

“It is guaranteed to touch every Jamaican citizen with its extensive support to the MSME business community,” he said.