February 1, 2021

IDB Invest, a member of the IDB Group, through a recent agreement with JMMB Bank has provided the bank access to US$35 million with a five-year tenure to facilitate increased financing to small and medium-size enterprises (SMEs). The project will also increase the availability of long-term financing to JMMB Bank to support the growth of its SME lending service, while contributing to the maturity and structure of its debt profile. This will in turn provide a diversification of funding sources, thereby decreasing the dependence of shorter-term deposits, to the benefit of SMEs. Jerome Smalling, CEO and executive director of JMMB Bank, said the partnership underscored the bank’s commitment to assist SMEs to scale and grow their businesses through the provision of holistic solutions to support them throughout their business life cycles. “We recognise that access to affordable financial solutions plays a key role in business operation and growth. The bank believes that this sector has tremendous growth potential and, in leveraging further support to the sector, the company is seeking to play its part in helping SMEs to realise their full potential and contribute even more to the country’s development,” he stated in a company release last week. The partnership will also see IDB Invest lending support to the bank on the development and implementation of an environmental and social management system. In addition, IDB Invest will provide advisory services to bolster internal capacity and an action plan to ensure that JMMB Bank’s human capital strategy attracts and retains the best talent pool. CEO of IDB Invest, James Scriven said his organisation was pleased to have closed this transaction with JMMB Bank. “This operation will allow SMEs in Jamaica to have greater access to financing, which makes me proud as this is part of our commitment to strengthen and support the increase in credit financing for SMEs within the Caribbean region by generating more jobs and promoting their development,” he stated. According to IDB Invest, the forging of this agreement also stemmed from the bank’s strong creditworthiness and capacity, which it said were also supported by its solid and stable financial performance. JMMB, as a part of its larger group strategy, has sought to to add value to its SME clients through the provision of financial partnership, resources, innovative financial solutions and by building a network to support growth. Through the opening of its SME resource centres in Trinidad and Jamaica within the last year, small businesses are provided with the relevant coaching and advisory services including marketing, taxation, accounting, business plan writing and other general financial management and back office support. Through its partners and other oganisations, JMMB has designed these SME Resource Centres to help small operators to improve their operational efficiencies as well as to lend expertise and provide access to resources — all of which will ultimately help them to grow their businesses to the next stage.

In Jamaica, where a significant per cent of employment is provided by micro and small entrepreneurs, taking ‘small’ ideas seriously is paramount to moving the economy forward. For two decades, JN Small Business Loans (JNSBL) has facilitated the emergence and sustenance of thousands of micro and small businesses across Jamaica, which, before the pioneering move by what was then the Jamaica National Building Society, had few places they could turn to seek financing for their operations, because: – Their owners and their operations lacked the assets to secure financing; – They could not articulate or present how they would grow their ideas; – With no assets to secure financing and little paper work to demonstrate the businesses’ performance and future projections, they were deemed too risky. But with the need to borrow as little as $5,000; an opportunity to use furniture or appliances to collateralise loans and a relationship on which micro and small businesses could depend to assist them to grow, JNSBL has demonstrated that not only can micro and small business operators be loaned funds, but that they also repay effectively. Over its two decades, the company has approved nearly 500,000 loans valued in excess of $48 billion, which have helped to maintain livelihoods and create jobs for some 200,000 Jamaicans, who merely need someone to take them seriously. Through sustained partnerships with entities, such as the Development Bank of Jamaica, EXIM Bank, the National Insurance Fund, the Tourism Enhancement Fund and the Jamaica Business Development Corporation, JNSBL has been able to channel financing to micro entrepreneurs in key sectors and provide capacity-building to assist with their sustainable growth. And, through partnerships beyond Jamaica, JNSBL has been able to forge diplomatic ties and establish cooperation that has enabled the company to share its success and also expand the body of knowledge available on the role of the micro and small business sector to the economy. This includes its continued partnership with the United States Agency for International Development, from which has spawned opportunities for study tours for businesses in Latin America and the Caribbean, as well as technical assistance and exchange opportunities for local micro and small businesses. FINANCING IMPROVES OUTCOMES; TECHNOLOGY IMPROVES ACCESS There is no doubt that having an available resource to which micro entrepreneurs can tap into creates a boon for businesses, their owners and their families to flourish. In 2008, a study by the Tropical Medicine Research Institute at The University of the West Indies underscored that there is a positive relationship between loan access for micro entrepreneurs and their personal economic achievement. The study showed that beneficiaries of loans from JNSBL enjoyed a better standard of living. They were more likely to own a home and had more expendable income than those who did not benefit from a loan to grow their operations. Technology has also been an important tool leveraged by JNSBL to strengthen access to financing for micro and small businesses. For more than a decade, the company has used technology to make payments convenient for clients and to also make sound decisions that allow it to serve them even better. Through its uniquely designed kiosks and JN Bank Smart ATMs, clients can visit JN Bank branches and point-of-sale locations in post offices to make their loan payments conveniently and quickly. The Global Information System (GIS) technology allowed JNSBL to equip its client relations team to make sound determinations about the vulnerability of clients, to consider external and environmental threats, as they worked to support and tailor solutions to meet the needs of our clients. JNSBL continues to invest in technology to better support the industry and to drive down the costs associated with supporting the sector. EMPOWERING THE MICRO AND SMALL BUSINESS SECTOR The innovations go a far way to support the Jamaican economy— our micro and small business sector, who, in addition to being provided with access to financing, are given an opportunity to establish or tighten personal relationships with the formal financial sector through the ownership of a bank account, so that they can develop financial footprints that will redound to even broader windows to access capital. But this access must be protected and recognised by the State to deepen financial inclusion and the sector’s participation in the growth of the economy. Over the years, JNSBL has, therefore, been a keen participant and supporter in the development and passing of legislation, such as the Security Interests in Personal Property Act (2013) to broaden the forms of collateral that can used to secure financing; and now the Microcredit Act, recently passed in the Senate to protect, in law, our micro entrepreneurs whilst supporting the ongoing development of the sector. JNSBL welcomes this legislation, not only for the legal protection it will afford our clients, but the confidence it will spur in the importance of the sector and the people who drive it. To grow, we believe firmly that we must build the confidence by reassuring our people that we will provide greater access to financial services for all Jamaicans while supporting their ongoing development. Gillian Hyde is the general manager of JN Small Business Loans Ltd

A key stakeholder in the export-import process has welcomed the tabling of the Customs Act, 2020, declaring that the proposed law will position the Jamaica Customs Agency (JCA) as a major player in facilitating modern international trade. Clive Coke, president of the Customs Brokers and Freight Forwarders Association of Jamaica (CBFFAJ), said that under the current 1941 legislation, the JCA focused primarily on revenue collection and the imposition of fines and penalties on those who violate the law. “This new act will definitely speed up things and improve efficiency within Customs and for the importing and exporting public,” Coke said in a Gleaner interview. The CBFFAJ head said that the proposed new statute would place Jamaica in a better position to improve its ranking in the Logistics Performance Index (LPI). “With Jamaica having an interest in improving its ranking in the logistics index, many of these things are dependent on Jamaica Customs stepping up its game and embracing worldwide standards other than just seeing itself as an enforcer,” he said. Jamaica ranked 113 out of 160 countries in the 2018 LPI. Based on the World Bank’s collection of development indicators, the efficiency of Jamaica’s customs-clearance process was reported at 2.42 in 2018 on a scale of one to five, where one is low and five is high. The LPI overall score reflects perceptions of a country’s logistics based on efficiency of customs-clearance process, quality of trade and transport-related infrastructure, ease of arranging competitively priced shipments, quality of logistics services, ability to track and trace consignments, and frequency with which shipments reach the consignee within the scheduled time. Commenting on the role of customs brokers in the facilitation of trade, Coke said that for the first time, persons in Jamaica who ply their trade as brokers and freight forwarders have been recognised in the parent legislation. He said that while regulations acknowledged the role of customs brokers, the current archaic law of 1941 did not recognise them. On the vexed issue of individuals who pretend to be customs brokers in an effort to fleece unsuspecting members of the public, Coke said that the sector had been grappling with this problem for many years and had reported the matter to the authorities at the JCA. He said that many persons presented themselves at the wharf under the pretence that they were licensed customs brokers. Jamaica Customs has a gazetted list of authorised customs brokers. DECEIVED BY COUNTERFEIT Coke said that some members of the public had been deceived by persons who posed as customs brokers and lost significant sums of money. “It is one of those things that the Shipping Association of Jamaica and the Customs Brokers and Freight Forwarders Association have been looking to actually operate the entire wharf area as a logistics park, so that we can have more control of these unauthorised persons who find themselves in the space,” he told The Gleaner. The Customs Act, 2020, will repeal and replace the current 1941 law in order to modernise customs practices and procedures to effectively and efficiently facilitate trade. The memorandum of objects and reasons states that the modernisation of customs practices is expected to bring benefits for the trading community and the JCA by improving customs-clearance and revenue-collection processes, simplifying procedures for businesses, and providing more efficient service delivery to the public. Meanwhile, Coke said that customs brokers had experienced a fall-off in business of between 30 per cent and 40 per cent owing to the impact of COVID-19. He said many members of the CBFFAJ in Montego Bay, who depend on the tourism sector for business, have had to reduce staff in the wake of low occupancy levels at the hotels.