SSL subsidiary Dolla Financial looks to Haiti and Guyana to boost growth
For many Jamaican companies, it’s not the diaspora in the north that is the new frontier, but our neighbours to the south in the Caribbean and Central America that are shaping up to provide investment opportunities. Stocks & Securities Limited (Barbados) through its microlending arm, Dolla, is one such company that is making strides to offer financing beyond Jamaica’s shores.
Dolla’s CEO Kadeen Mairs explained his company’s strategy and how they view the income opportunities in two specific countries. Mairs holds an MBA from the University of Technology, and previously worked at the Hanover Co-operative Credit Union and National Commercial Bank (NCB) before launching out on his own to be the founder and CEO of M25 Investments Ltd, a microfinancing start-up.
Dennise Williams (DW): We understand that Dolla is currently exploring opportunities in Haiti and Guyana. Yet both countries could not be more different in economic outlook. Haiti would be more focused on remittances and Guyana would be more financing of equipment and working capital needs related to its expanding energy sector. So with one country battling political and social upheaval and another country battling to maximise its newly found oil wealth, what was the spark of opportunity that the team at Dolla saw?
Kadeen Mairs (KM): Dolla Financial views the Caribbean as its home. We are Jamaican-born with our parent company in Barbados and as such we find it only natural that emerging economies of the Caribbean should be able to have access to our services.
Haiti is not only close to us in proximity but also close to our hearts; one of our institutional shareholders, Caribbean Investor Capital (CIC), has invested in Haiti and understands the political and social climate very well as they are also Haitian who have helped to build business there from gas stations to factories and even investment banks approved by the Bank of the Republic of Haiti. These strategic partners give us immediate access to thousands of potential Dolla customers in Haiti whom Dolla could help to raise their standard of living and help to become more self-reliant through business ownership with the access to credit that Dolla Financial would provide.
Guyana is the new eye of the Caribbean with its discovery of oil and has been poised for tremendous growth. Just like oil, “Dolla fuels growth” but through access to financing there is a lot in common in the onset. We have explored and visited Guyana and met with governmental officials and the business community who welcomed Dolla and the benefits that we would provide for their people. With the emergence of oil, people need to get training, buy equipment, all at a cost which they may not be able to cover independently, hence the need for short-term financing amongst many other needs that access to credit can solve. The agricultural sector as well is massive and we will be working alongside farmers and small business owners to get the capital that is needed to bring their business forward.
DW: International research suggests that the primary market for microloans are women and rural residents with an average loan size of less than US$1,000. What is your experience in tapping into this market?
KM: When we launched out Dolla Microloans in rural Hanover, Jamaica, the majority of our market was comprised of women who were in business and growing businesses. Tapping into that market has since been an easy transition everywhere we go, as we understood their needs, kept learning, maintaining, and building a long-lasting mutually beneficial relation which spurred a lot of economic growth from the community level.
DW: In the micro-financing model, how does the “get to know your client (KYC)” requirement work in Jamaica and how can that be replicated in Haiti and Guyana?
KM: The microfinancing model has been tested and proven all over the world, from India to the Philippines and the Caribbean, everywhere. Even though we work with individuals who typically cannot access traditional banking services or the “unbankable” – we have managed to run a very similar ship to our commercial banks in terms of KYC. As a matter of fact our KYC goes beyond identification, tax registration number and proof of address; we actually understand the needs and wants of each customer which allows us to better manage the business. Haiti and Guyana are very similar – Guyana especially, given that our financial systems are pretty much the same, except we are a little ahead.
DW: Are you totally reliant on the credit bureau in Jamaica to determine loan worthiness and if, yes, would you be more reliant on technology in other emerging jurisdictions that don’t have credit reporting?
KM: We do not rely on the credit bureau solely in any case to determine the credit worthiness of our customers. We are very traditional in our approach and it has worked excellently which reflects in our low default rates. We understand our market, we understand that the majority of our market do not traditionally access the banking system and would not have credit scores or credit histories. Hence why we stick to their Character, Capacity and Capital while using technology which we are big on. Our human touch along with technology is what sets us apart.
DW: In countries like Kenya, micro credit lenders offer loans as low as US$2.00 as the exchange rate allows that amount to make a difference to a small street seller. In what ways do you see Caribbean micro financing as meeting the needs of lower-scaled entrepreneurs?
KM: The amount we lend is based on what the customer needs, that is why we have no minimum that we lend. I personally have done loans for the guy who sells jerk chicken on the side of the road, who only wanted $3,000 to assist to buy a new jerk pan which he needed that same day. We understand entrepreneurship and we understand the role that we place in promoting it.
DW: And with the market acceptance of micro credit, what is next for Dolla? Would micro savings and micro insurance be the next frontier for your company?
KM: Dolla is always growing, always evolving. We have been looking at micro insurance for a while now, so there would be no surprise if we tap into that market. Once we continue to provide simple money solutions for life and business, then we know we will continue to do our part in advancing the economy.
DW: The vision of microfinancing was to be the major tool to eradicate poverty. Now that you are casting a Caribbean-wide focus, what is your view of your role in the entrepreneurial growth of the region?
KM: Poverty rates have fallen but much more work needs to be done. Access to credit is one tool to help individuals to start and build businesses and become more independent. Our role in the entrepreneurial growth of the region is also to teach, starting with the younger generation the importance of a business and business management – how to grow a business, what to expect and how to overcome challenges. We will be launching a Millennial Entrepreneurial Programme in the near future geared toward young small business owners.