Asserting that Micro, Small and Medium Enterprises (MSMEs) are the backbone of the country’s economy, the Government of Jamaica has made a significant intervention through key state agencies in an effort to rescue such struggling businesses from the economic dislocation arising out of the COVID-19 pandemic.
Last week the authorities in Kingston made public, a collaborative arrangement involving the Development Bank of Jamaica (DBJ), and the Ministry of Finance to launch what is described as the Social and Economic Recovery and Vaccine (ISERVE) Jamaica Programme that seeks to provide support for affected MSMEs.
The project which is backed by up to J$3 billion was launched by Jamaica’s Minister of Finance Dr. Nigel Clarke and will, among other things, provide J$1 billion in Go-Digital loans to support investments in software and digital technologies to help strengthen their capacity to function effectively in the COVID-19 environment. MSMEs will also benefit from J$2 billion in recovery loans to help boost their working capital support, refinancing, and credit expansion needs, as part of the process of their recovery from the impact of the pandemic.
The Jamaican Minister of Finance is quoted as saying that the initiative was driven by government’s awareness that “MSMEs are the backbone of the economy; our economic recovery becomes more robust and resilient, and our economy becomes more efficient when our MSMEs integrate digital solutions in their business processes and make strategic investments in projects that enhance their recovery from the COVID-19 pandemic.”
Under the Development Bank of Jamaica Go-Digital facility, MSMEs can access up to J$800,000 at an interest rate of two per cent to help enhance their digital capabilities through investment in both software and hardware. The Bank’s Recovery Loan Facility also affords MSMEs access to up to J$10 million to support recovery efforts from the pandemic. These loans have a tenure of eight years and are attended by an interest rate of 5%.
The loan facility can support the reduction of the debt service burden for borrowers and provide alternative investment in capital projects that would allow the MSME’s to pursue new entrepreneurial opportunities.
Meanwhile, local small businesses in the beauty care, grooming, and agro-processing sectors with whom this newspaper have spoken have restated their concern that the post-COVID-19 environment may find that several once-thriving businesses have gone under on account of the consequences of the COVID-19 pandemic. Their primary complaint is that ceilings set on loans for MSME’s are arbitrary and take little or no account of the likely scale of the recovery costs that are likely to result from the ravages of the pandemic.
