MICROCAPITAL STORY: Jamaica National Small Business Loans (JNSML) Aids in the Expansion of Small Businesses in Jamaica through Microfinance.

Jamaica is experiencing an economic turnaround from its past financial problems. After almost a decade of stagnation, Jamaica’s economy is showing signs of revival. Growth briefly resumed in the country before being hampered somewhat by the external shocks of hurricanes Dean (2007) and Gustav (2008). GDP increased by 1.5% from 2004 to 2006, and inflation has also been steadily decreasing since. Although the natural disasters shocked large parts of the economy, especially in agriculture, the country still shows signs of a progressive economic trend. A number of additional factors, both external and within Jamaica’s private sector and institutions not only contribute to its growing economy, they also form an environment that is very conducive to the creation of small enterprises.

The CARICOM Single Market (CSM) was enacted in 2006 by the Caribbean Community is a grouping of the Member States that provides freedom for businesses to be established throughout the area. This free trade agreement removes tariffs and duties, creating a single market and enforcing regulated standards throughout the Community. This will not only open up a vast market for numerous businesses, but will also significantly increase the growth potential for currently established small businesses.

The Jamaica National Building Society is the island’s largest mortgage company, with assets of $67 billion at March 2008. The large firm plays a major role in facilitating the creation of small businesses in the country. Through the services of its subsidiary, Jamaica National Small Business Loans Ltd. (JNSML) the Jamaica National Group provides a wide array of financial products targeting the specific challenges faced by business owners and potential entrepreneurs within Jamaica’s evolving business environment.

The four major financing packages offered by JNSML are directed at small businesses within different stages of development and maturity. The firm recognizes that one of the major challenges facing small businesses is the limited financing options available in the commercial sector. Entrepreneurs frequently face difficulties providing acceptable collateral to traditional lending institutions, so the firm designed its loan products to increase the chances of qualifying for its loans. They also strive to maintain a close relationship with clients to ensure the loan is properly serviced.

JNSML also targets the lack of management experience that plagues small businesses in Jamaica. They do this by commissioning the Jamaican Business Development Centre (JBDC) to provide a micro and small business training program for clients. Since the start of the program more than 5,000 micro and small business operators have been trained.

JNSML is capitalizing on the large growth potential in small businesses and entrepreneurs on the island. By addressing that sector’s primary difficulties and making use of country’s expanding opportunities, JNSML’s services and products will serve as important inputs towards small enterprise expansion within Jamaica.

By Yrenilsa Lopez, Research Assistant

ADDITIONAL INFORMATION

Jamaica: Country Profile. Euromonitor International. May 25 2008

Caribbean Net News.“What the business sector should know about the CSM.”

The CARICOM Single Market and Economy (CSME)

Jamaica National Building Society: Jamaica National Small Business Loans Limited.

Jamaica Gleaner News. Micro finance – vital life support for small businesses. By Amitabh Sharma.