Why are banks loans so hard to come by for the small business sector? And why has the small business sector not done better financial management to make getting loans easy? The Private Sector Organization of Jamaica (PSOJ) has heard the cries of the small business sector and has pulled together a team of financiers from the credit unions, commercial banking, microcredit lending, and development banking sector. The PSOJ has created an Access to Finance Facilitation Panel (AFFP) to “bring greater awareness to government’s access to finance reform agenda and provide input and support for the adoption and expansion of the access to finance programme across various stakeholders through a process of facilitation and coordination.”
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And with all the stakeholders who stake hold, what will be the result? A closer working relationship between the banking sector and the small business sector. The team lead by Keith Duncan, JMMB Group CEO, expects that in less than 2 years, the following will be the reality in Jamaica:
- “Financial institutions can create a viable, efficient and profitable way to better unlock capital for MSMEs while being fully compliant with the relevant local and international regulatory requirements.”
That is, lend more money without more headaches from sketchy borrowers.
- “MSMEs can have better access to capital to grow their businesses through the life cycle by leveraging high-quality technical support services.” So the banks will help in the process to help the small business sector clean up their business processes so that they are good lending candidates.
- “Financial institutions’ credit processes will become easier and more transparent for MSMEs.” The goal is to tone down the red tape for small business lending.
- “MSMEs will recognize and receive significant value from being formalized, regularized and trained.” This answers the ‘What’s In it For Me’ question that prevents the small business sector from complying with government agencies.
- “There is a major transformation of the business ecosystem in Jamaica so that Jamaica is better prepared to create more robust economic growth, with a wider range of successful businesses and fuller national employment.” More small businesses with access to credit = more jobs.
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Now you may be asking how all of this will be done? The answer is that the team will be inviting members of the small business sector to a series of workshops and getting to the heart of the stagnation. It will be a great opportunity for the small business person to share their thoughts with bankers and for bankers to implement.
