Jamaica National Small Business Loans supporting clients through COVID-19Sunday, January 24, 2021
BY DAVID ROSE
Even as COVID-19 continues to decimate small businesses and render many firms unable to generally operate, Jamaica National's Small Business Loans (JNSB) arm has been extending a helping hand to its various clients especially micro-entrepreneurs whose lives have been uprooted due to the pandemic.
JNSB, which describes itself as a specialised lender to small businesses, with a loan book of over $4 billion spanning more than 20,000 clients, works with these entities which can range from a small manufacturing outlet to a vendor on the roadside who can be classified as a micro-entrepreneur paving their way to better days.
The company, which provides loans for as low as $20,000, is currently the largest specialised lender to small businesses in the Caribbean, according to general manager of the JNSB, Gillian Hyde, who was speaking at a recent Jamaica Observer Business Forum.
“We serve some of the most vulnerable communities across Jamaica. These people would not be able to gain access to financial services which includes credit from commercial banks. JN has spent a lot of time trying to put in the right processes and procedures for those who don't have access to traditional assets. We believe in an idea, in a possibility, in an opportunity and service that vision,“ Hyde told the Business Forum.
The company has a focus of ensuring that no more than five per cent of its portfolio is at risk of being unpaid over seven days. Due to this careful risk management, JNSB disburses 1.5 times more than its book value in any given year to its clients.
“JNSB has been very responsive to their needs and works with them on repayment of loans while assisting them in managing their affairs.
"All customers who engage with JNSB must have a savings account, which is a key stepping stone to getting the client on a solid financial track. This relationship is quite distinct especially since each client gets a relationship officer who goes to where they operate and work with them on that level," Hyde said.
With the advent of COVID-19, JNSB responded quickly to its clients especially those in the tourism sector as the portfolio at risk over a week ballooned to more than 50 per cent by the end of March. This meant providing payment holidays, moratoria and even forgiveness of debt to some clients.
“What COVID has done is really reminded us that these large chains are serviced by micro-entrepreneurs. The micro sector would have been suffering the impacts of COVID from January and February. When COVID arrived in March, our micro-entrepreneurs suffered tremendously and continue to be impacted. We would have put in a whole suite of lifeline products and services to assist these customers in difficult times.
“Our micro-entrepreneurs have really demonstrated to JN over the years that they have a strong commitment to repaying. We have worked with them to understand debt and manage debt,” Hyde shared.
Despite the initial impact of the virus, most of its clients have been able to get back on a solid track and have been moving online to apply for the financing they need. Hyde described this as a journey the company has had to take customers on especially since most of them are not used to digital and are used to the high touch form of business engagement.
“JNSB has facilitated many of its clients to access the services of its affiliate JN Bank, which would include higher products like certain structured loans and business credit cards. By utilising these services provided by JN Bank, these clients are be able to process payroll, automate the disbursement of staff loans and access other services under the JN Group umbrella. There's also the added benefit of utilising the cashback feature which would allow customers to take some cash and put it back to work."
Even with a vaccine in sight, new testing requirements for certain North American countries have threatened to derail some of the recovery that the tourism sector has been hoping for since March. Despite this, Hyde explained that JNSB is working carefully with clients in this sector and related areas to manage their debt in this uncertain period.
“Through our support and our partnership with the Tourism Enhancement Fund, we operate a strong book of loans on their behalf. We continue to extend special moratoriums and payment holidays and work with them on an individual basis to ensure that we see them through this time,” she said.
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