Unclaimed Funds as Financing Option for MSMEs

Photo: Adrian Walker Minister of Industry, Commerce, Agriculture and Fisheries, Hon. Audley Shaw (centre), congratulates President, Jamaica Exporters’ Association (JEA), Michelle Chong, and President, Jamaica Manufacturers’ Association (JMA), Metry Seaga, following the announcement that the JEA and the JMA have merged. Occasion was the opening ceremony for Expo Jamaica 2018 at the National Indoor Sports Centre on April 19. At left is Minister without Portfolio in the Ministry of Economic Growth and Job Creation, Daryl Vaz, and at right is Chief Executive Officer, Digicel Jamaica, Justin Morin. Expo Jamaica 2018 is being held under the theme: ‘Advancing Breakthroughs’.

Story Highlights

  • The Government is to engage technical consultants to assess the feasibility of utilising unclaimed funds, held by financial institutions, as a critical financing option for the growth and development of the micro, small and medium-sized enterprise (MSME) sector.
  • This was disclosed by Minister of Industry, Commerce, Agriculture and Fisheries, Hon. Audley Shaw, at the launch of the 46th staging of Expo Jamaica at the National Indoor Sports Centre, in Kingston, on April 19.
  • “The international average of unclaimed funds, before they return to Government, is seven years and (in) most of the states of the United States, the period is even less, it’s five years. In Jamaica it is 15 years, and our banks have demonstrated a consistent propensity to deplete those accounts as much as possible before it gets to the hands of the Government, so we are looking very carefully at that,” he noted.

The Government is to engage technical consultants to assess the feasibility of utilising unclaimed funds, held by financial institutions, as a critical financing option for the growth and development of the micro, small and medium-sized enterprise (MSME) sector.

This was disclosed by Minister of Industry, Commerce, Agriculture and Fisheries, Hon. Audley Shaw, at the launch of the 46th staging of Expo Jamaica at the National Indoor Sports Centre, in Kingston, on April 19.

Mr. Shaw said he has charged the Ministry to accelerate work on the matter, so that players in the sector may access funds at four to five per cent interest rate from this source.

“The international average of unclaimed funds, before they return to Government, is seven years and (in) most of the states of the United States, the period is even less, it’s five years. In Jamaica it is 15 years, and our banks have demonstrated a consistent propensity to deplete those accounts as much as possible before it gets to the hands of the Government, so we are looking very carefully at that,” he noted.

Mr. Shaw said equity financing remains one of the challenges within the sector, and the Administration is working to change that.

“Larger and more developed companies have the option of using equity financing through the stock markets to obtain capital for expansion plans, but at their stage of development, our MSMEs need incubator funds to push them forward,” he explained.

In the meantime, the Minister informed that 30 per cent of the 1.5 million square feet of space dedicated to agro-processing, business process outsourcing, manufacturing, distribution and warehousing, being built by the Factories Corporation of Jamaica (FCJ), will go to small and medium-sized enterprises.

“I have also requested a survey of abandoned and underutilised buildings, especially in downtown Kingston, with a view to making these available to small manufacturers. As Minister, I commit to working closely with the FCJ to respond to the needs of our manufacturers,” he said.

Mr. Shaw pointed out that MSMEs are the drivers of employment, economic growth and wealth creation worldwide.

“Any government that is serious about economic growth, job creation and prosperity would be foolhardy to ignore this critical sector. It is for this reason that the Ministry has now put in place an institutional framework through the MSME Division and the Jamaica Business Development Corporation to provide support, address policy issues and assist with their development at the enterprise level,” he said.

Meanwhile, the Presidents of the Jamaica Manufacturers’ Association (JMA) and the Jamaica Exporters’ Association (JEA) jointly announced that both entities had merged to form the Jamaica Manufacturers’ and Exporters’ Association.

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