The Access to Finance Facilitation Panel, a group made up of the Government, private institutions and business development organisations, is exploring movable assets as security for loans as one of the measures aimed at hitting a $100-million target in private sector credit to small and medium enterprises, or SMEs, by 2020.
The movable asset-based lending initiative, which already has success in Bosnia, Guatemala and Peru, will see small business operators repaying loans from operating cash instead of from company profits.
It means that SMEs across Jamaica should soon be able to access loans from the commercial banks, backed by assets such as accounts receivables, inventory and equipment.
At the end of March 2019, loans and advances from Jamaica’s commercial banks totalled $742.8 billion, of which SME lending accounted for 10 per cent. The Government of Jamaica, under the National Financial Inclusion Strategy, NFIS, hopes to grow the ratio to 12 per cent of the total loans and advances from the commercial banks by 2020.
But this latest push to “unlock the full potential of the SMEs” also unlocked the frustrations of small business owners, who chastised lenders for the speedy processing and payout of motor vehicle loans while business operators are left to the “mercy of the banks” when trying to access loans to expand their businesses.
“I’m tired of the talking with the banks, I’ve heard this too many times. All I’m interested in seeing is a brown bag full of money in front of me,” declared Michelle Smith, owner and CEO of Chocolate Dreams.
“Stop talking about you guys understand, because you don’t. You don’t know what small business operators are going through. You don’t visit our business places. You sit behind a desk in high heels and ties,” Smith said as she chided lenders at the launch of the PSOJ/JBA Partnership for SME Empowerment workshop.
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