Billions for MSMEs; women as Gov't pushes growth agenda
Some $1.8 billion will be made available for loans to MSMEs during the 2019/2020 financial year according to Finance and Public Service Minister, Dr Nigel Clarke.
The government will be targeting the Micro, Small and Medium-sized Enterprises (MSME) sector as well as women, in its push to boost economic growth and expand opportunities.
To this end, some $1.8 billion will be made available for loans to MSMEs during the 2019/2020 financial year according to Finance and Public Service Minister, Dr Nigel Clarke.
At the same time, the so-called Side Car Fund which has received technical and financial support from the Inter-American Development Bank will be launched.
It will make available some $200 million in equity financing to very early stage, scalable and investment-ready startups, by matching the support from identified Angel Investors on eligible ventures.
“We expect that the Side Car Fund will address issues that hinder women’s participation in tech scalable start-ups,” Clarke said as he presented the budget for the 2019-2020 fiscal year while opening the Budget Debate last Thursday.
“Mr Speaker, finance is the oxygen of business. Ideally, we want private financial institutions to provide competitive credit options for all businesses. However, given the government’s commitment to expand economic opportunity for all we will be improving access to finance by significantly increasing allocations for MSME financing through the Development Bank of Jamaica and other intermediaries,” Clarke said.
Of the $1.8 billion to be made available to MSMEs over the course of the next 12 months, Clarke said $1 billion will be channelled through the Ministry of Economic Growth and Job Creation.
A further breakdown of the amount shows the following:
1. $600 million will be set aside to provide loan guarantees through a Credit Enhancement/Loan Guarantee Fund, to MSMEs with limited or no access to the collateral required to access loans. This represents an increase of $350 million or 140 per cent over $250 million in financial year 2018/2019.
2. $400 million will be spent to finance the Risk Capital Financing Fund for MSMEs.
3. $763 million will be channelled through the Ministry of Finance and the Public Service.
4. $500 million specifically reserved for micro businesses with sales of less than $10 million.
5. $263 million line of credit between the Ministry of Finance and the Development Bank of Jamaica under the Foundations for Competitiveness and Growth project.