In Jamaica, where a significant per cent of employment is provided by micro and small entrepreneurs, taking ‘small’ ideas seriously is paramount to moving the economy forward.
For two decades, JN Small Business Loans (JNSBL) has facilitated the emergence and sustenance of thousands of micro and small businesses across Jamaica, which, before the pioneering move by what was then the Jamaica National Building Society, had few places they could turn to seek financing for their operations, because:
– Their owners and their operations lacked the assets to secure financing;
– They could not articulate or present how they would grow their ideas;
– With no assets to secure financing and little paper work to demonstrate the businesses’ performance and future projections, they were deemed too risky.
But with the need to borrow as little as $5,000; an opportunity to use furniture or appliances to collateralise loans and a relationship on which micro and small businesses could depend to assist them to grow, JNSBL has demonstrated that not only can micro and small business operators be loaned funds, but that they also repay effectively.
Over its two decades, the company has approved nearly 500,000 loans valued in excess of $48 billion, which have helped to maintain livelihoods and create jobs for some 200,000 Jamaicans, who merely need someone to take them seriously.
Through sustained partnerships with entities, such as the Development Bank of Jamaica, EXIM Bank, the National Insurance Fund, the Tourism Enhancement Fund and the Jamaica Business Development Corporation, JNSBL has been able to channel financing to micro entrepreneurs in key sectors and provide capacity-building to assist with their sustainable growth.
And, through partnerships beyond Jamaica, JNSBL has been able to forge diplomatic ties and establish cooperation that has enabled the company to share its success and also expand the body of knowledge available on the role of the micro and small business sector to the economy. This includes its continued partnership with the United States Agency for International Development, from which has spawned opportunities for study tours for businesses in Latin America and the Caribbean, as well as technical assistance and exchange opportunities for local micro and small businesses.
FINANCING IMPROVES OUTCOMES; TECHNOLOGY IMPROVES ACCESS
There is no doubt that having an available resource to which micro entrepreneurs can tap into creates a boon for businesses, their owners and their families to flourish. In 2008, a study by the Tropical Medicine Research Institute at The University of the West Indies underscored that there is a positive relationship between loan access for micro entrepreneurs and their personal economic achievement. The study showed that beneficiaries of loans from JNSBL enjoyed a better standard of living. They were more likely to own a home and had more expendable income than those who did not benefit from a loan to grow their operations.
Technology has also been an important tool leveraged by JNSBL to strengthen access to financing for micro and small businesses. For more than a decade, the company has used technology to make payments convenient for clients and to also make sound decisions that allow it to serve them even better. Through its uniquely designed kiosks and JN Bank Smart ATMs, clients can visit JN Bank branches and point-of-sale locations in post offices to make their loan payments conveniently and quickly.
The Global Information System (GIS) technology allowed JNSBL to equip its client relations team to make sound determinations about the vulnerability of clients, to consider external and environmental threats, as they worked to support and tailor solutions to meet the needs of our clients.
JNSBL continues to invest in technology to better support the industry and to drive down the costs associated with supporting the sector.
EMPOWERING THE MICRO AND SMALL BUSINESS SECTOR
The innovations go a far way to support the Jamaican economy— our micro and small business sector, who, in addition to being provided with access to financing, are given an opportunity to establish or tighten personal relationships with the formal financial sector through the ownership of a bank account, so that they can develop financial footprints that will redound to even broader windows to access capital.
But this access must be protected and recognised by the State to deepen financial inclusion and the sector’s participation in the growth of the economy. Over the years, JNSBL has, therefore, been a keen participant and supporter in the development and passing of legislation, such as the Security Interests in Personal Property Act (2013) to broaden the forms of collateral that can used to secure financing; and now the Microcredit Act, recently passed in the Senate to protect, in law, our micro entrepreneurs whilst supporting the ongoing development of the sector.
JNSBL welcomes this legislation, not only for the legal protection it will afford our clients, but the confidence it will spur in the importance of the sector and the people who drive it. To grow, we believe firmly that we must build the confidence by reassuring our people that we will provide greater access to financial services for all Jamaicans while supporting their ongoing development.
Gillian Hyde is the general manager of JN Small Business Loans Ltd