Jamaica’s economic reform programme, over the last four years, has impressed the Inter-American Development Bank (IDB), a top executive disclosed last Wednesday.
“We are in awe, somewhat, of what Jamaica has accomplished since 2013 in the fund programme in creating the preconditions to any kind of macro-stability. The fund programme was not easy, but it’s been supported by both parties and has achieved so much in fiscal consolidation and really setting the groundwork for everything that comes forward,” Julie Katzman, executive vice-president of the IDB, said.
Katzman was speaking ahead of the signing a US$20-million (J$2.56 million) credit enhancement programme for micro, small and medium enterprises (SMEs) between the Jamaican government and the IDB, at the finance ministry’s Heroes Circle office in Kingston.
The programme, to be executed by the Development Bank of Jamaica (DBJ), will provide partial credit guarantees for approved financial institutions to on-lend. The estimated 200,000 local formal small and medium enterprises as well as micro enterprises, which number between 200,000 and 400,000, over the years have been handicapped by lack of access to affordable financing, due largely to inadequate collateral and high interest rates.
Milverton Reynolds, managing director of the DBJ, spoke to The Gleaner about how this programme will fundamentally transform its ability to serve this segment of its client base.
“It means that we are looking at another US$4 million per year, over the next five years, in credit guarantees. When we revamp the programme and move the guarantee from the current 50, we are looking to get to 90 per cent, over time. Can you imagine the impact that will have on the SME sector and their ability to get financing?
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