In the upcoming financial year, the Government, through the Development Bank of Jamaica (DBJ), will provide 340 new loan guarantees for Micro, Small and Medium-sized Enterprises (MSMEs).
A loan guarantee is a pledge by one party (the guarantor) to assume the debt obligation if the borrower defaults.
This arrangement is to be facilitated under the Access to Finance for MSMEs project, for which an additional sum of $750 million has been allotted to undertake this and other activities in support of small businesses.
The funds, which have been provided for in the 2022/23 Estimates of Expenditure, will also enable 15 SMEs to get access to risk capital through the SME Fund; and facilitate an improved voucher programme through the use of the New Interactive Technological Platform.
Up to December 2021 under the project, 387 MSMEs were issued with guaranteed loans through the Partial Credit Guarantee (DBJ’s Credit Enhancement Facility (CEF) – Loan Guarantee Fund); and approval of an additional 580 guarantees were supported under the CEF.
In addition, 248 MSMEs were supported under the DBJ’s Vouchers for Technical Assistance. An SME Fund Manager was also selected to establish and manage an SME Fund; and a risk management system was implemented for the DBJ.
The project, which seeks to improve access to finance for MSMEs, is being implemented by the DBJ, with funding from the International Bank for Reconstruction and Development. It is scheduled to run from March 2018 to January 2023.
In the meantime, another $789.7 million has been set aside under the DBJ’s Credit Enhancement Programme to provide 107 bank guarantees to SMEs during the new financial year.
Financed by the Inter-American Development Bank (IDB), the project aims to promote productive investments in MSME in Jamaica by enhancing their access to financing particularly medium and long-term loans.
Up to December 2021, 550 bank guarantees were issued to MSMEs under the project.
The project is scheduled to run from September 2017 to September 2023.