JN, IDB sign off on project targeting rural communities

Sunday, January 17, 2010

THE Jamaica National Building Society (JNBS) Foundation and the Multilateral Investment Fund of the Inter-American Development Bank (IDB-MIF) have signed an agreement to implement an Information Technology (IT) project that will enhance the provision of financial services to rural communities.

The initiative, called the Provision of Remittance and Other Financial Services to Rural Communities in Jamaica, has three components that will allow residents in the targeted communities to gain easier access to a range of financial services, including remittance receipts, point-of-sale and small business loan payments.

The project has been budgeted at US$300,000 and will be rolled out in an initial ten low-income communities, which are to be named. The MIF will provide US$210,000 of the total funding, on a non-reimbursable basis, and the JNBS Foundation will contribute the additional cost.

"We welcome the support of the IDB," says Earl Jarrett, Chairman of the JNBS Foundation, who points out that, "This project will bring meaningful development to underserved rural communities where many residents frequently travel many miles to access simple financial services."

He notes that it will also increase their participation in other areas of the formal financial sector.

Carina Cockburn, Multilateral Investment Fund Specialist at the IDB, says this will be the first remittance-related project in Jamaica to be funded by the IDB.

"We hope that this project will engage the residents of these rural communities and encourage them to use the formal financial system; manage their resources more effectively and leverage their remittances to access financing for productive activities," Cockburn says.

The JNBS Foundation, the philanthropic arm of the Jamaica National Building Society, will lead the project, Jarrett explains, supported by JN's Community Banking Unit, which already facilitates expansion into financially underserved communities.

The first component of the project will be to establish the IT network which will facilitate access to remittances and small business loan payments as an initial objective. The network will utilise the Society's e-Money application which is a secure Internet-based money transfer system that provides services in real time.

The network will be implemented by providing point-of-sale devices to community merchants, who will act as Agents of both JN Money Services Limited and JN Small Business Loans Limited. These merchants may include hardware stores, community supermarkets, haberdasheries, restaurants or other community businesses that consistently handle cash transactions.

Using their JN Money Transfer cards at these locations, persons will be able to receive their remittances.

"How it will work," explains Shereen Jones, JNBS Group Chief Information Officer, "is that you will swipe your card on the machine and enter the amount. The POS device will communicate to the IT Centre and from there the system will check if a remittance was sent to the customer's account and that the requested amount is available. Once verified, the Centre will communicate back to the Agent to disburse the funds."

Once the network has been established, a financial literacy component will be implemented to sensitise residents about how to access the services using their JN Money Transfer card. Persons will also be allowed to use their JN Money Transfer card as a debit card to purchase goods and services at sundry locations; and to make JN Small Business Loan payments using their JN cards.

"The aim of the project is to break down the barriers to financial access," Saffrey Brown, general manager of the JNBS Foundation, says.

"Improving the access of financial services to rural Jamaicans will impact rural development in a meaningful way," Jarrett says. "It is capable of reducing the tide of rural-urban migration, as it will lessen the need for persons to travel outside of their community to access services and seek employment. That will, in effect, also reduce current levels of rural poverty."

Improving people's access to these services will empower them and make them more capable of contributing to the development of their communities and to the nation at large, the JNBS Foundation Chairman maintains.

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JN, IDB sign off on project targeting rural communities