Marcus James, truly a Jamaican success story


Sunday, April 20, 2014

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In 2000 when 28-year-old baby-faced Marcus James went downtown Kingston to make his pitch to higglers and small business operators, he was not only armed with a dream and an idea but a fiercely quiet determination to bring them to reality.

Operating out of a shoebox-sized office space of 400 sq ft in a corner of a building owned by his parents and a staff complement of himself and two HEART trainees, he was in the early days 'head cook and bottle washer'.

"I was doing IT, training, travelling extensively, getting involved in delinquency management and just about everything. Most times I reached home at one in the morning," he said, while we sipped ice-cold sorrel and munched on crisp salt-fish fritters one day last week.

Something may have tripped in from early to point to his success — scoring among the top 10 in the region in Math CXC while at Campion College, becoming tennis champion, securing a tennis scholarship to the University of West Carolina, getting his BBA there, then his MBA with distinction at the UWI.

In the early days when he travelled all across the island in order to offer his ideas of micro financing to those who were shut out of accessing credit from the big banks, even in his wildest dreams, I am certain that he never saw what would later happen:

* In 2009, first company to list on the Junior Market of the Jamaica Stock Exchange (JSE);

* In 2011, named Entrepreneur of the Year by Young Entrepreneurs Association;

* Recognised in 2012 as PSOJ/Gleaner 50 under-50 Business Leaders;

* Again in 2012, first in profitability among Top 100 Microfinance organisations in Latin America and the Caribbean;

* Winner Excellence in Microfinance Award for 2012 at the inaugural Citi Foundation Micro Entrepreneurship awards for the English-speaking Caribbean;

* And then in 2013, a list of 'best' and 'first' — first company to list a bond on the bond trading platform, best-performing company on the Junior Market, Junior Market overall winner and winner of the Citi Foundation Award for excellence in Micro Finance Product Innovation.

Access Financial currently has a market capitalisation of $2 billion, has 160 employees, operates from 15 branches and serves in excess of 16,000 clients. The company has branches in Kingston and St Andrew, Spanish Town, Montego Bay, Mandeville, May Pen, Portmore, Black River, Junction, and Savanna-la-Mar.

The very obvious question would be, why would anyone or any set of persons want to upset a company whose first quarter profits in 2014 of $80 million were 30 per cent up from the first quarter profits of 2013? Why would a small handful of 'complainers' want to remove the very CEO and founder, Marcus James, under whose leadership the company has enjoyed fantastic success?

Makes no sense to me, but let us examine the background.

If it ain't broke, don't fix it

Behind the success of Access Financial Services are many stories of the 'little man and woman' whose lives, to those who often sit at the top, are often of no consequence. Not so to Marcus James.

"I have followed the trajectory of their lives — the repeat borrowers, I mean — and you can see their development, whether it is being able to sufficiently capitalise a shop or add on an extra room to the house. You can see it, it's tangible and it's a great feeling to know that Access has made a difference in their lives," he said.

According to his father Neville, "When he started, although he wasn't trying to tell these smart business-savvy so-called small people that he had a model to replace the "partner", he pointed out to them the bankable alternatives."

Neville James laughed as he said, "I am certain that quite a number of them were prepared to take him to the cleaners and he has had his fair share of bad loans, but over the years, he became like a champion to many of them, especially as they developed their small business concerns and their lives."

Jamaica has long been known as anti-business, clogged up as it is with layers of government regulatory mechanisms seemingly designed to slow down any business train that an eager entrepreneur would dare to take down the track. What it has probably not been so well known for is the sort of business model where hostile takeover of companies is more than the norm.

The truth is, not only is Jamaica hostile to business start -ups, but the success stories like Access are not necessarily a regular part of the Jamaican business landscape.

So, if a cherry tree is grown, and it was nurtured by a man, once the cherries have ripened on the tree and they continue to do so year after year, there may be some who may believe that it is as good a time as any to take over the cherry orchard and get rid of the man who brought the first fruit to maturity.

In the present scenario where Access in 2006 sold 49 per cent of its shares for $38 million to Mayberry at a time when Access was worth $78 million, the value of those Mayberry shares are now worth $1.2 billion! What a rich bounty for an investor!

The Mayberry investors who sit on Access' board have now decided to move against Marcus James, the CEO, a man who, in my judgement, is just too damn decent, clean, caring of the little man and probably was never at any time in a mood to hear the howls of wolves outside the walls of the city. To James, as long as he persisted in expanding his business and making the little people advance their lives, there was no need to engage his 'third eye'.

Empowering women

It has been shown time after time that whenever microfinance companies in developing countries disburse loans to a disproportionate degree to women, this assists the development of the overall economy.

There is no secret in this, especially in our own situation where our womenfolk are household heads to a level that still makes us uncomfortable. Our men are
falling down.

Access Finance has struck gold in its loan portfolio among its over 16,000 clients where about 70 per cent of its loans are to women. Fact check. In developing countries women tend to meet their obligations to their children, their household, and to loans that they had contracted to a much greater degree than their menfolk.

According to Nobel Laureate Professor Yunus of the famed Grameen Bank in Bangladesh, who devised the original model of lending to women, "Thirty-five years ago, I did not know that I would start a bank, and that I would lend to poor people, especially to poor rural women. Like many other teachers, I was busy teaching in the classroom, far from the realities on the ground. But Jobra village took my future into a completely different direction. I saw, first-hand, how the loan sharks enslaved the villagers; I thought that if I were to lend money to the poor, then the villagers could be free from the grasp of the loan sharks. That is what I did."

It is certainly no secret that quite a number of companies in the financial sector that had invested heavily in government paper took a blow in the JDX and the NDX, and companies like Mayberry, which had a huge part of its portfolio in government paper, would have been counted among those. This, of course, does not take away anything from Mayberry and its principals who simply did what sensible business people would do.

As the company which handled the IPO for Access, one would have thought that with the fantastic growth of Access, even with Mayberry principals owning a sizeable chunk of the Access shareholding, the 'right thing to do' would be for Mayberry and its principals to be encouraging Access and its CEO, Marcus James, to step up the ladder of greater success. In other words, if it ain't broke, don't fix it.

It should also be stated that one of Mayberry's principals sits on the board of the JSE. How does this pan out?

A company that facilitates IPOs and wants to encourage other budding entrepreneurs to bring their business ideas to reality has brought about a situation where the general public is seeing it trying to remove the CEO, who is just about the brightest young entrepreneur that this country has seen in the last decade and a half. Does that make any sense?

Recent development in the business of Access

That 400 sq ft of space that James used to launch the business was, as I stated before, in a little corner of a building owned by his parents. My information is that Access Financial had that space and the extended portion as it grew rent-free until 2009.

According to James when we spoke last week, "We needed to expand the physical infrastructure. From where we were operating as the head office there was no boardroom, a branch was upstairs and we needed that to be on the ground floor, especially for our disabled customers. Not only that, but our competitors were renovating and we needed things like, as I said before, the branch downstairs, we needed a training room, a sick room and a wellness centre. Any amounts that Access spent, that is now made to be in dispute by others, was simply done to ensure that all of those facilities were in place."

In a bad economy, when a company posts a first quarter profit in 2014 of 30 per cent over the same period last year, that company's CEO ought to be celebrated and embraced by the business community. Is that what we are seeing now?

What messages are we sending to our next batch of bright, capable entrepreneurs? More importantly, in the case of Access, what message are we sending to the over 16,000 clients, 70 per cent of whom are women?

Are we telling them that the company is in disarray and that the next time they set out to seek funding, none will be available?

Have those who scratched where no scratch was needed fully thought this through? I suspect not, but myopia tends to do that.

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