Jamaican MSMEs opt for savings rather than borrowing to fund start-ups — Study
POTENTIAL micro, small and medium sized enterprises (MSMES) in Jamaica would rather save than borrow their start-up capital, according to findings of a study done by a member of the Inter-American Development Bank (IDB) Group.
The issue of borrowing isn't trivial — persons have to access personal and business loans, but they don't want to be saddled with debt, said Therese Turner-Jones, IDB country representative, Jamaica.
Turner-Jones revealed this aspect of the findings of the study done by the Multilateral Investment Fund on Monday. The occasion was the launch of the fifth annual Caribbean Microfinance Forum (CFM), which is to be held in Montego Bay, June 2-5.
There, the findings of the research that examined informal markets for microcredit in Belize, Guyana, Suriname and Jamaica will be presented.
It looked at the profile, the risks and impediments to lending in those markets.
"Essentially, it was found that some people don't want to borrow especially with high interest rates," said Turner-Jones. She added that this is the extent to which the various stakeholders, including the IDB can help MSMEs.
MSMEs in the Caribbean need capacity building, where they can get help with their business plans, and market research, so this is what CMF seeks to address, she said.
Jointly funded by the Multilateral Investment Fund, the European Union, Caribbean Development Bank and the Citi Foundation, the CMF is designed to create a more developed microfinance industry in the English-speaking Caribbean.
The event has attracted microfinance practitioners, microfinance networks, development banks as well as service providers. It has also benefited from microfinance experiences from the Pacific, Europe, USA and the Caribbean.
This year, CMF V will be expanded to examine financial services for frontier markets, but from a client's perspective — the entrepreneur. It will focus on three main pillars: youth entrepreneurship — ecosystem for scalability and sustainability; farmer to entrepreneur — transforming the rural economy and technology — innovating to respond.
Young people in the Caribbean constitute the next wave of productive citizens, so it's really important to harness that potential for employment to help this group of people in the region develop, so it's very important to make this a successful venture, said Turner-Jones.
CMF has been supported since 2009 by the Caribbean Capacity Building Microfinance Project II managed in Jamaica by Development Options, and Enlcude, a multinational firm that supports th development of the microfinance industry.