VIDEO: Loan product coming for creative industries
Access to financing for Jamaican creative industry players, a perennial challenge for the sector, could get a boost with the imminent launch of new loan products geared specifically for those enterprises.
"We are just finishing a piece of research for an organisation on actually developing new loan products and services for the creative industries," said Maureen Webber, project manager for the Caribbean Microfinance Capacity Building Project (CARIB-CAP II).
"(The organization) will be launching a new product for the creative industries... I won't say more on that right now," she added.
Webber was speaking to journalists at this week's Jamaica Observer Monday Exchange meeting on the microfinance sector.
CARIB-CAP II aims to create a more developed microfinance industry in the English-speaking Caribbean by improving outreach and financial performance, and fostering a knowledge-sharing ecosystem in the region. It is jointly funded by the Multilateral Investment Fund, a member of the Inter-American Development Bank Group; the European Commission; Citi Foundation; and the Caribbean Development Bank.
Jamaica's creative industries -- including music, film, fashion, publishing and animation -- have been tapped as a major prospect for long-term growth given the country's strong brand and skills in those areas. But despite the richness of their potential, industry entrepreneurs have long found it difficult to obtain financing from the traditional banking system partly due to their perceived high-risk profile and the speed at which financers want a return on loans.
"If I want to get my lap top and certain equipment, I can't guarantee any kind of cash flow initially, but I need a loan," said Webber, highlighting the challenge for creative industry interests.
Curvin Whyte, microfinance coordinator at COK Sodality Credit Union, said financers are still trying to learn the industry.
"The creative industry has provided a niche for financing," said Whyte.
"The financers themselves, however, have to understand the industry itself and be able to dissect the cash cycle of the industry because it is new to financers," he added.
Indeed, the statistical profile of entrepreneurs accessing micro loans paint a daunting picture for those engaged in development. According to Webber, some seven in 10 borrowers accessing micro loans are retailers.
"The very fact that 70 per cent of the people who are accessing loans are borrowing money for buying and selling, because that is the only way that they get any margins to carry that forward, tells you something," Webber said.
CARIB-CAP II have been providing technical support and training to microfinance institutions (MFIs) to boost lending for development projects.
"There is no development activity happening, and in this case we are giving a lot of technical support and training to the MFIs," Webber said.
Globally, the cultural and creative industries have an estimated worth of US$2.2 trillion and are growing at an annual rate of five per cent. Fuelled by 'brand Jamaica', it is believed that the country has a competitive advantage in the lucrative market.
According to Creative Economy 2010, published by the United Nations, Jamaica had a US$6-million trade surplus in its creative services, according to the latest data up to 2008, stated the report's index.
Meanwhile, the government has continuously reiterated its commitment to the creative industries and has over the years been allocating more expenditure to the creative sector through investment promotion agency Jampro -- reaching over $1 billion in the 2012/13 financial year. For 2013/14, the Creative Industries Unit at Jampro facilitated 84 investment projects, one more than the year prior, according to data from the Economic and Social Survey published by the Planning Institute of Jamaica. The film/television sub-sector represented the bulk of the projects, with 62; followed by 10 photography projects; eight "special events"; two music projects and two radio projects, with total expenditure amounting to $813.3 million.
PHOTO: Micro Finance
Curvin Whyte (right), microfinance coordinator at COK Sodality Credit Union, addresses journalists at the recent Jamaica Observer Monday Exchange. Looking on are Maureen Webber (centre), project manager for the Caribbean Microfinance Capacity Building Project, and COK micro loan client Stacy-Ann Spencer. (Photo: Naphtali Junior)