Members of the micro, small and medium-sized enterprises (MSME) are set to benefit from increased access to finance following the recent launch of a programme by Government which will see the sector benefiting from loans at a concessionary interest rate of 4.75 per cent per annum.

The MSME Capital and Business Loan (MSME/CBL) programme, done in partnership with the National Export-Import Bank of Jamaica (EXIM Bank) and the Jamaica National Small Business Loans (JNSBL) and the Ministry of Industry, Investment and Commerce (MIIC) through a signed memorandum of understanding (MOU), has been designed to stimulate the growth and development of small businesses.

This, as Government and other stakeholders move to remedy the years of neglect and long-standing systemic barriers which has hampered growth for the sector. The facility specially designed for MSMEs in the productive sector is seeking to not only help these businesses mitigate against the impact of the novel coronavirus, but also assist in their long-term endeavors to reset, retool and expand their operations post-pandemic.

Speaking at the launch event held yesterday, managing director of the EXIM Bank Lisa Bell said that her entity was thrilled to be leading the charge in providing an outlet for members of this important yet largely underserved sector.

“In the face of the pandemic, we want to make sure that these entities can weather this crisis. This loan programme and other initiatives are especially important as the financial sector struggles to craft financial solutions that are best able to respond to the growing needs of this sector. As a development banking institution, we have a lot more flexibility to fill the gaps created where commercial banks can’t step into the space,” she said, noting that her entity to date has provided financing for over 2000 companies.

“This signals our understanding of the MSME sector and what is required to help them rebound,” she stated.

Through the $675-million loan programme, to be managed by the EXIM bank, members of the sector operating businesses in the areas of manufacturing and agro-processing, tourism, agriculture, restaurants among other selected services will stand to benefit from what stakeholders have dubbed the second-lowest interest rate in the market at single digit and under five per cent.

JNSBL will have responsibility for $200 million of the offered funds which it will be responsible for providing to micro enterprises — eligible to borrow up to $5 million, while the other over $400 million is to be made available to the remaining SME sector through the EXIM bank. These enterprises are eligible to borrow up to $25 million per borrower from the allotted funds with a repayment period of up to five years.

General manager of JNSBL Gillian Hyde, in commenting on the partnership, said that her organisation was happy to join in the venture as the programme supports the bank’s “ongoing efforts to create financial gateways and assist customers to take advantage of opportunities but more importantly, to help entrepreneurs ravaged by the pandemic, to recover from the crisis and to become stronger.

“Since our inception in 2000, we have dispersed more than 500,000 loans to the sector at a value of over $50 billion and have remained true to our mandate to provide financial access for underserved Jamaicans, closing financial inclusion gaps and allowing entrepreneurs the ability to invest in themselves whilst creating employment opportunities for many others,” she added.

The MSME sector, which comprises approximately 500,000 operators is deemed a critical component of economic growth. Contributing close to 60 per cent of gross domestic product (GDP), these entities also provide significant levels of employment.