JIS News

Minister of Finance and Planning, Dr. Omar Davies, has said that there is need for a new study of the country’s micro, small and medium-sized enterprises (MSME), so that stakeholders can have a better understanding of what is taking place in the sector.
“It cannot be that what we are still relying on is a 30-year old study and quoting numbers based on an economy that no longer exists,” the Minister said, as he addressed a financial sector stakeholders meeting held recently at the Technology Innovation Centre located on the University of Technology’s Old Hope Road campus.
While acknowledging that such a study will be expensive, the Finance Minister insisted that it is necessary as “otherwise we are speaking in generalities” and using data that is old. He noted that any study of MSMEs must include the services industry, which is becoming a critical element of the overall economy.
Citing the example of a Jamaican musician going on tour overseas with a contingent of some 25 persons, Minister Davies said that this was a highly skilled professional, who is probably producing as much as a factory and “is someone who is a major exporter of services as well as employing a substantial number of persons.”
“It is imperative that we now recognize that this sector is playing a greater role in terms of the overall economy and that it can drive demand in the real sector,” he stated.
In the meanwhile, he said that there are an increasing number of opportunities for MSMEs to capitalize on, especially since the country is now experiencing growth in a number of sectors.
“Take for example a hotel with 500 guests; that’s 500 high-income people eating, drinking and wishing to be entertained and therefore these are new opportunities that are being presented to Jamaican entrepreneurs,” he outlined.
He noted however, that it is sometimes challenging for medium and small enterprises to capitalize on these opportunities because of financial constraints. “We have to ensure that there are adequate loan resources available to lend to small and medium sized enterprises,” he pointed out.
The government recently made some $1 billion in loan financing available to MSMEs through the National Insurance Fund (NIF).
However, a major impediment to its disbursement is inadequate protection of loan commitments. As a result, the Institute of Law and Economics (ILE) in collaboration with the Technology Innovation Centre, is seeking to introduce an Enterprise-Wide Risk Management and Financing Programme (ERMFP), through a network of business associations called the MSME Alliance. The programme will provide services that help to enhance competitiveness and strengthen the capacity of members to manage their cash flows and loan portfolios.

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