Trade Development Project

This Project which is financed by the European Union was launched in January 2000.  Under the Project, technical support will be provided to small firms to assist them to improve their competitive advantage to gain access to export market.

Micro Business Support Programme

To support the vast micro business sector, a new initiative known as the Micro Enterprise Business Development Services Project will commence operation in the First Quarter of the 2000/2001 Financial Year.  The project will be for three (3) years and is estimated to cost $30 million and will be funded from the credit reflows of the GoJ/GoN Micro Enterprise Project.  The Project will employ international best practice principle in the delivery of business development services to the micro sector.  Under the Project, demand-led training will be provided by private service providers to micro enterprises.  It will also provide demand-led counseling and technical support by private service providers and experienced retired volunteers to micro enterprises.  Micro enterprises will be required to co-finance the training and counseling to avoid the traditional inefficient supply-led delivery of these services. 

The provision of technical support to the MSEs is regarded as integral to the development of the MSE sector.  While access to credit is a major constraint, it is also recognized that at the micro enterprise level, technical support is critical if they are to borrow, manage their projects properly considering the risks and repay their loans successfully.  This project will finance training and a limited amount of technical support for MSEs and is intended to complement the MSE credit programmes.

MSE Sector Credit Bureau

Most of the Micro Finance Institutions (MFIs) are currently experiencing high arrears rate that is affecting their viability.  One of the main contribution factors to this problem is the tendency of borrowers to refuse from honoring their repayment obligations to the MFIs. 

A strategy is therefore needed to put pressure on borrowers to repay on a timely basis.  In this regard, the Ministry of Industry, Commerce and Technology will be working with the MFIs to establish a special MSE Credit Bureau Service. 

Under this strategy, the Bureau would rate borrowers from each institution based on repayment information on the borrower.  In addition, the Bureau would maintain a Register of Defaulters.  Defaulters could be blacklisted and barred from accessing funding under any GOJ – related lending programs until outstanding loans are repaid.

GOJ/EU MSE Credit Scheme

Approximately 80% of the funding under this project will provide credit to the small business or small enterprise sector and the remaining 20% to the micro business or micro enterprise sector.  This project represents the major source of funds for the MSE sector at this time.  Approximately $180 million remains to be disbursed by the European Union under the project. 

Based on the project document and financing agreement with the European Union, a disbursement of approximately $60 million is anticipated from the European Union in February 2000 and another $60 million later in the year.

Government of Jamaica/Government of the Netherlands Micro Finance Programme (MicroFIN)

Funds under this programme are wholesaled by Development Options Limited (DOL) to interested credit institutions.  However, emphasis will be placed on the establishment of specialized Micro Finance Organizations (MFOs) island-wide that will be dedicated to on lending to the micro sector.

The programme is designed to circumvent the collateral barrier and other constraints regarding access to credit.  It is based on modern international best practice methodology in micro credit.  The MFOs will not insist on traditional collateral.  Strong emphasis will be placed on creditworthiness and project viability.  Loans to the MFOs will be at 11% but the MFOs will be permitted to charge a sustainable interest rate so that the Government will not have to subsidize the programme.  An important feature of the programme is that loans will be rigidly capped at $100,000.00 to avoid upward migration of the portfolio. 

Funds for on lending will come from the repayment of loans made under the earlier GoJ/GoN Micro Enterprise Project.  The total value of the GoJ/GoN loan portfolio is approximately J$250 million.  During the financial year, approximately $150 million could be available for on lending under the programme. 

Business Development Clinics – Provide technical assistance to firms in business planning consultation, financial services brokerage, legal counsel, and so on. 

Craft and Gift Sector Programme – A Strategic plan regarding the development of the indigenous craft industry will soon be prepared.