Development Bank of Jamaica issues $4.85 billion in loan guarantees to boost MSMEs

Jamaica: The Credit Enhancement Facility (CEF) of the Development Bank of Jamaica (DBJ) has put out a phenomenal sum of $4.85 billion over the course of the past year acquiring in loan guarantees, boosting the micro, small, and medium-sized enterprises (MSMEs) island wide.

This substantial Financial Guarantee Support offered with 383 loan guarantees would go a long way in dealing with the nagging problem of access to credit by MSMEs for business expansion to contribute better to the national economy.

The announcement was made by the General Manager of the CEF, David Wan during the CEF Superstars Awards held at Courtyard Marriott in Kingston on August 14. The event aimed at acknowledging the best performers in the sphere of financial institutions and MSMEs supported by the CEF program.

“The CEF is committed to the promotion and support of the development of MSMEs because of the improvements that the organization sought to bring on their access to funds,” Wan said.

“The guarantees that we have issued over the past year demonstrate our desire to see those businesses obtain the credit they require, commence operations and fuel economic growth through the generation of employment opportunities,” he added.

The additional collateral coverage is provided by the CEF to the Approved Financial Institutions (AFIs) and Micro Financial Institutions (MFIs) that endeavour to pass on credit facilities to MSMEs operators. It helps to decrease the effective risk level for the lenders and, therefore, allows MSMEs to get the appropriate financing for development.

To build up the MSMEs, 130 businesses have enrolled in the recent executive educational workshops designed to prepare the firms for public tenders. It formed a part of the Public Procurement Readiness Project, which is a four sessions training programme conducted by the Ministry of Industry, Investment and Commerce.

These workshops were organised by the Office of Public Procurement Policy (OPPP) under the Ministry of Finance and the Public Service (MOFPS) and in collaboration with the Jamaica Business Development Corporation (JBDC).

Karen Hylton, a small business financing specialist at the Ministry of Industry, was very vocal in support of these workshops. For instance, she pointed out that MSMEs struggle with procurement diffusion and crucial knowledge on acquiring government contracts.

These workshops, which were taken at the JBDC’s Incubator and Resource Centre in Kingston, touched the core business areas such as the procurement process, bidding strategies and bid compliance issues.

Both of these measures are argued to point to the Jamaican government’s continued support for the growth of MSMEs, acknowledging the important contribution they make to the country’s development.

Jamaican MSMEs are set to contribute even more to the growth and development of the country when access to credit improves and businesses are willing to tender for public sector business.