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Minister of Industry, Investment and Commerce, Hon. Karl Samuda, has clarified the operations of the Micro Investment Development Agency (MIDA) and the Jamaica Business Development Corporation (JBDC), countering claims that the organisations are functioning under “an institutional conflict of interest.”
He was responding to questions previously raised by Opposition Member of Parliament (MP), Phillip Paulwell (East Kingston and Port Royal), while opening the 2010/11 Sectoral Debate at Gordon House on Tuesday (May 11).
Mr. Samuda said the questions were raised due to the fact that MIDA is now being operated under the same roof as the JBDC. He said it has been argued that this arrangement has created an institutional conflict of interest, by having the same entities wholesaling and retailing funds.
However, the Minister explained that although MIDA was physically moved to JBDC’s headquarters on Camp Road, Kingston, as part of the Ministry’s rationalisation programme to reduce cost and improve coordination and collaboration, it does not fall under the JBDC. He also said that the JBDC does not influence the operational decisions of MIDA.
“Both share the same board of directors, but each is independent and autonomous. The question of conflict of interest does not, therefore, arise,” he said.
Mr. Paulwell had also questioned the mandate of the JBDC, stating that it was created with a “core mandate of providing technical support for small enterprises.” However, Mr. Samuda said the JBDC’s core mandate of business development has not changed, and its current lending activity is only a small part of its overall operation.
The Minister also denied that there was no provision in the budget for the incubator centre (Incubator and Resource Centre, IRC). He said that there was an allocation of $12 million in the budget to support the IRC in the area of food processing, and there is budgetary provision for the continuation of the Jamaica Business Information Centre (JAMBIC) within the JBDC’s budget.
“It has also been suggested, that the JBDC has been reaching only one per cent of small and medium enterprises. While we embrace the entire MSME sector, the services provided by the JBDC, both financial and non-financial, deliberately focus on the productive sector,” he stated.
Mr. Samuda said this sector accounts for approximately 33 per cent of the MSMEs, or about 132,000 entities. He said last year, JBDC’s 12,000 new clients accounted for about 10 per cent of the target sector and not the one per cent suggested.
He told the House that, for the period 2009/10, some 12,350 individuals/entities were assisted by the JBDC. This assistance took the form of general business advice, training, product development, marketing and consultations. About 2,200 new clients were also dealt with during the year.