The Development Bank of Jamaica (DBJ) on Thursday, June 30 entered into an agreement with VM Investments Limited (VMIL) to jointly back the Jamaica Actus Small and Medium Enterprise Fund (JASMEF) to the tune of US$15 million.

JASMEF is a private equity fund created by DBJ to provide capital support for small and medium-sized enterprises (SMEs). DBJ will provide US$5.5 million to the fund through a partnership struck between the Government of Jamaica and the World Bank. US$500,000 will be allocated for technical assistance.

In addition to the DBJ’s contribution, VMIL has also committed US$10 million to JASMEF and will seek to raise additional capital for the fund through large institutional fund managers. VMIL will also participate in the management of JASMEF alongside London, England-based Actus Partners, which was selected as part of a bidding process in 2021 to manage the fund. VMIL will have one representative on the fund’s committee to assess investments in prospective SMEs.

“VM Investments has a solid reputation for providing active and purposeful support to SMEs. We are very excited to work alongside Actus, the DBJ and the World Bank to facilitate meaningful growth and expansion of the SME sector. We are in the business of transformation and are eager to help transform even more lives and businesses,” said Rezworth Burchenson, CEO of VM Investments Limited.

With JASMEF aiming to provide up to US$50 million in private equity funding to local SMEs, Burcheson encouraged “investors that are looking on to step forward and play their role in financing this fund because this fund will pave the way for the creation of a much more vibrant ecosystem”.

According to a release from the DBJ, JASMEF will support at least 15 SMEs by providing access to equity or quasi-equity investments between US$100,000 and US$2 million, particularly to businesses operating in sectors such as technology, climate and renewable energy, agriculture, food security, health, hygiene, tourism, and other areas.

Founder and director of Actus Partners Murat Tasci said that the focus of the fund will be on “high-growth potential” SMEs in Jamaica.

“We would like to address the financing gap when it comes to equity in Jamaica, but also the Caribbean region as well,” he added.

Actus Partners will also introduce local SMEs to its global network to facilitate their expansion across the Caribbean, the Americas, Africa, and the Middle East.

SMEs that will apply for funding through JASMEF will need to have been operational for the last three years with 12 months recurring positive net income and cash flow. However, larger and well-established global companies that are expanding their footprint in Jamaica and the Caribbean through a local SME will be considered.

As part of the World Bank-funded Access to Finance project, JASMEF will follow ESG requirements and has a key objective to achieve measurable impact targets and alignment with United Nations Sustainable Development Goals.

Speaking on behalf of the World Bank at the signing, senior financial specialist Fadwa Bennani underscored that SMEs account for the majority of businesses globally, employ the largest number of people, and, as such, drive job creation and economic growth.

“The launch of this first-of-its-kind Jamaica-focused SME equity fund will further support the Government of Jamaica’s effort to increase SME productivity and financing in the post-COVID economic recovery phase,” the World Bank representative said.