Published: Monday | August 18, 2014
Daraine Luton, Senior Staff Reporter
The Development Bank of Jamaica (DBJ) is projecting the
creation of 12,000 jobs over the next five years which are to come as a result
of a massive flow of capital being made available to the business sector,
particularly the micro, small and medium enterprise (MSME) sectors.
General manager for risk and strategy management at the DBJ,
Claudine Tracey, said this is potentially game changing.
"We have assessed that through lending to the MSME
sector we can, in five years, get $30 billion in investment and 12,000 in new
Tracey, who was a guest at a recent Gleaner Editors' Forum,
said the DBJ made the projections having examined its supply of credit as well
as the demand for funding in the marketplace. She said the assessment was in
relation to the bank making loans available to the MSME sector.
The World Bank recently approved a US$50-million loan for
the country's Competitiveness and Growth Project, which will benefit existing
and new businesses through the streamlining of regulations and processes,
public-private partnerships, as well as training and access to financing.
Industry Minister Anthony Hylton said the BPO sector is
among those that will be generating the jobs. He said that some 2,500 new jobs
are expected on line this year as a result of a US$10-million to US$15-million
project which is to be situated in Manchester.
"Our demand is strong," the minister said of the potential
"Our constraint is how rapidly we can create space for
it," Hylton said.
Edison Galbraith, general manager, loan origination and
portfolio management at the DBJ, said the bank has targeted the ICT, approving
US$23 million in loans to create 500,000 square feet of space for the sector,
which is expected to create 11,000 new jobs.
Meanwhile, Tracey said the World Bank-funded loan project
will be focusing on skills training and capacity development within the MSME
She said with many organisations now bypassing players in
the MSME sector and going overseas to source aspects of their inputs, the World
Bank project could assist them in improving their competitiveness, thereby
enabling them to benefit through the supply chain.
Tracey said the World Bank intervention, which targets more
than 180 SMEs, will lead to a 7.5 per cent increase in sales or US$10.8 million
over six years.
But Maureen Webber, chief executive officer, Development
Options Limited, said a "sea change" is needed as it relates to how
financial institutions view players in the MSME sector. She noted that the last
labour-force survey found that there were 412,600 own enterprises, which
includes professionals such as doctors and lawyers, the majority of which are
"We need to have a different way of looking at the
small and medium enterprises," Webber said.
She noted that the industry ministry is exploring the idea
of providing venture capital for SMEs, but said more has to be done.
"I really think that we don't have our handle and the
size or the need, nor are we inside the space of the small entrepreneur,"
She argued that despite the widely held view that Jamaica
should invest in areas such as agriculture and the creative industries,
important stakeholders such as financial institutions have not been stepping up
to the plate with the provision of loans.
"We say it is our future, but we have not invested in
their capacity building and given them the creative loans ... . None of the
lenders want to lend to the creative industries," Webber lamented.
Jamaica has targeted GDP growth of 2.5 per cent by 2016-17
when the four-year extended fund facility ends. Jamaica has suffered from very
low growth, high public debt, and serious social challenges.
The Government has told the IMF that it is committed to
implementing a growth strategy built on time-bound fiscal consolidation and
structural reforms aimed at reducing impediments to growth, complemented by
strategic investment facilitation.The Government has said it will be providing
increased financing to MSMEs, wholesaled through the DBJ. It has set a target
of doubling the amount of funds made available to MSMEs by 2016-17, relative to