IDB Lab has approved a US$1.5 million ($236.91 million) technical cooperation grant to support capital market access for small and medium enterprises (SMEs), including those participating in the Jamaica Stock Exchange’s (JSE) Micro Market Sandbox.

The IDB Lab project was approved on September 4 and reported on October 9 by the innovation and entrepreneurship laboratory of the Inter-American Development Bank Group (IDB).

The non-reimbursable grant is aimed at expanding access to equity financing and other growth capital opportunities for emerging Jamaican enterprises. This will be executed through the establishment of structured market mechanism that identifies, validates, prepares, and connects investable firms with investors and capital market intermediaries.

“The project, which will be executed by the Jamaica Stock Exchange Limited (JSE) is expected to benefit 200 enterprises participating in the Micro Market Sandbox, with 100 completing the process,” stated Natacha C Marzolf, IDB Group’s Country Representative for Jamaica in a LinkedIn post.

The grant forms part of a total US$3 million ($473.94 million) project which will see a counterparty providing US$1,500,790 in financing to the overall project. The counterparty was not identified on the IDB Lab’s project page.

The JSE Micro Market is a sub-market of the JSE’s Junior Market and has been designated as Junior Market Tier 2. The new market was formally launched on June 23 with the updated Junior Market rule book published in July.

This new market allows smaller companies to raise between $50 million and $100 million in an initial public offering (IPO) through the issuance of new shares. The companies benefit from the same income tax concessions afforded to companies that list on Junior Market Tier 1, and will also uphold the structure of a listed company. Firms on this market must have a sponsor that provides ongoing strategic, governance or developmental support to the company and a mentor.

Ten companies were initially identified at the market’s launch, but the Government later said a wider pool of 25 Jamaica Business Development Corporation (JBDC) accelerator graduates had been identified as potential candidates.

“Of these, 40 are expected to receive investment readiness grants, 25 to secure external financing outside the JSE, and 10 to list on the Micro Market, raising approximately US$5 million,” Marzolf explained in her post.

Although the JSE will be the lead firm in executing this project, the project is aimed at strengthening the overall capital market space for SMEs. As such, other organisations will receive support to guide entrepreneurs in their developmental journey.

“In addition, 10 Entrepreneur Support Organizations will receive capacity-building to strengthen their ability to identify, prepare, and assist high-potential firms, indirectly benefiting an estimated 600 entrepreneurs through their programs,” the IDB executive noted.

This project represents one of the latest initiatives being undertaken by IDB Lab. Other projects undertaken by the Lab include the start-up plan for the Spanish Town Hospital for whichUS$150,000 has been set aside in technical cooperation, the Jamaica Ocean Farming Alliance which will benefit from another US$300,000 and the Jamaica’s mushroom sector project for which US$280,000 has been earmarked.