The Inter-American Development Bank (IDB), a US-based multilateral finance institution that operates in Latin America and the Caribbean, recently committed USD 50 million in loan funds for Jamaica. The first disbursal of USD 25 million is meant to provide technical and financial assistance to foment sustainable growth among micro, small and medium enterprises (MSMEs), including startups and individual entrepreneurs. The IDB credit line will carry a term of 25 years, a grace period of 5.5 years and an interest rate based on the London Interbank Offered Rate (LIBOR). The government-backed Development Bank of Jamaica Limited (DBJ) will manage the funding, a portion of which will provide matching grants for ventures supported by angel investors.
Therese Turner-Jones, the IDB country representative for Jamaica, said, “New businesses make an economy more vibrant. This injection of funds will help build Jamaica’s entrepreneurial ecosystem, unleash the creativity of the people, and contribute to economic growth as well as improve the lives of Jamaicans.”
Owned by the government of Jamaica, DBJ is mandated to foster the growth of “strategic” economic industries in the country, with a special emphasis on developing the MSME sector. The institution was formed in 2000 through the merger of the Agricultural Credit Bank of Jamaica and the National Development Bank of Jamaica Limited. Rather than funding individuals or projects directly, DBJ routes funds via financial institutions, including microfinance institutions, which evaluate loan applications and supervise outstanding loans. As of 2018, DBJ reported total assets of JMD 31.9 billion (USD 235 million) and a loan portfolio amounting to JMD 19.4 billion (USD 143 million).
Established in 1959, IDB works with governments, companies and NGOs to provide loans and grants to support small and medium-sized enterprise (SME), health, education, and other sectors. IDB also provides technical assistance and research in these areas. With 48 member countries, IDB has offices in Washington, DC; Japan; France; and all 26 of its member countries in Latin America and the Caribbean. During 2018, IDB disbursed loans totaling USD 11.3 billion, reaching a total of USD 93.4 billion in loans outstanding.
By Anna Gravois, Research Associate
Sources and Additional Resources
IDB press release
https://www.iadb.org/en/news/jamaica-promote-innovation-growth-and-entrepreneurship-ecosystems-idb-support
IDB homepage
https://www.iadb.org
DBJ homepage
https://dbankjm.com
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