The Development Bank of Jamaica (DBJ) will be on-lending $5 billion to micro, small and medium-sized enterprises (MSMEs) over the next 12 months.
This was announced by Minister of Finance and the Public Service, Dr Nigel Clarke, at the launch of the 50th anniversary of the Inter-American Development Bank (IDB) operations in Jamaica, at its country offices in St Andrew last week Thursday.
Clarke informed that the undertaking will be facilitated under the Government’s revamped Credit Enhancement Facility (CEF).
The CEF, which is financed by the IDB, was established in 2009 to increase access to credit for MSMEs that lacked adequate collateral to secure loans.
Through the facility, the DBJ provides partial guarantees to affiliated Approved Financial Institutions to cover up to 90 per cent of the sum on individual MSME loans not exceeding $49.3 million, for up to 10 years.
Clarke noted that “an enhanced and repackaged” CEF was launched two weeks ago, with technical support from the IDB to provide greater support for MSMEs.
“With the IDB’s advice, we have been able to revamp that programme entirely and use a portfolio approach for insurance purposes, where the first loss up to a level that is way beyond the historical bad debt ratios of commercial institutions, the DBJ guarantees, and with the portfolio approach, we have been able to increase the potential size of the facility by nine times,” he said.
Clarke pointed out that since the establishment of the CEF 10 years ago, a total of $5 billion has been on-lent to MSMEs through financial institutions.
In the meantime, the finance minister praised the IDB for assisting the country over the last 50 years in making great strides in its development.
“The IDB is working across every nook and cranny of Jamaica and their support has been critical to where we have reached. The IDB has been a tremendous partner to Jamaica and the successes that we enjoy today and the future successes that we anticipate, would not have been possible without their support,” he said.
For her part, IDB’s Country Representative in Jamaica, Therese Turner-Jones, noted that over the last 50 years, “remarkable progress has been taking place in Jamaica.”
“The future holds a lot of potential for this country. The IDB and all the international partners are really here because we care about this country. We know there are opportunities,” she said.
Meanwhile, the IDB donated $500,000 to the Combined Disabilities Association to assist with the medical needs of some of its members.