THE Jamaica Stock Exchange (JSE) and the Jamaica Manufacturers and Exporters Association (JMEA) have signed a memorandum of understanding (MOU) that will benefit the small and medium-sized enterprises (SMEs) sector in particular, and the Jamaican economy overall.
SMEs account for the majority of businesses worldwide and, according to the World Bank, they account for about 90 per cent of businesses and employ more than 50 per cent of the world's workforce.
Speaking at the signing ceremony on Thursday, Minister of Industry, Investment and Commerce Aubyn Hill said, “These are often the industries that are most vulnerable to external shocks. The COVID-19 pandemic reinforced that fact. Though we are almost 10,000 kilometres away, we are feeling the effects of the war in Ukraine, in the rising prices for commodities such as fuel, fertiliser and food. There is worldwide disruption as the global supply chain and logistics distribution arrangements experience great strain. Businesses must now look locally and regionally to provide products that would normally be imported from farther afield.”
Research shows that access to capital is the second most cited obstacle entrepreneurs face to grow their businesses in emerging markets and developing countries.
“This partnership with the JSE and the JMEA is, therefore, very timely. For the long-term survival of this sector, companies should be listed on the Jamaica Stock Exchange to allow them access to necessary equity capital,” Hill stated.
With that said, he noted that “not one of the businesses listed on the stock market folded during the COVID-19 pandemic.” This is due to several key factors including good corporate governance, the company's ability to pivot during this period, availability of additional equity funding or loans at much cheaper rates than what other companies which are not listed on the stock market would pay.
With this MOU, more companies are expected to be listed on the stock market.
Hill used the opportunity to encourage business people including local manufacturers and exporters to not only look at the Jamaican market of under three million people but to also explore markets in the Caribbean and Latin America.
“Let us also look at the diaspora market. We estimate that there are over three million people in the Jamaican Diaspora. They are already familiar with our products and services, making it a much easier market in which to sell our products and services. Taking advantage of these regional and diaspora markets will allow us to earn hard currency to support the Jamaican dollar,” he said.
He further encouraged the JMEA to help Jamaica diversify and produce more goods and services for the export market. At the same time, he highlighted that the JSE exists to mobilise capital and provide access to capital.
“What is needed are ready participants, ready entrepreneurs and ready businesses, to access this capital. This Government is a committed supporter of the Junior Market,” Hill said, adding that it's for this reason the Government opted to maintain the tax incentive for the Junior Market when there were calls to remove it.