FHC is first credit union to offer DBJ’s redesigned credit facility
First Heritage Co-operative Credit Union (FHC) Chief Executive Officer Roxann Linton and Development Bank of Jamaica (DBJ) Managing Director Milverton Reynolds sign their respective copies of the new agreement between the two organisations at the DBJ office.
First Heritage Co-operative Credit Union (FHC) became the first credit union to sign on to the Development Bank of Jamaica’s (DBJ) redesigned Credit Enhancement Facility (CEF) on Wednesday, at the DBJ offices in Kingston.
FHC Chief Executive Officer Roxann Linton and DBJ Managing Director Milverton Reynolds signed their respective copies of the agreement in the presence of senior staff from both organisations.
The CEF is a partial loan guarantee that helps micro, small and medium-sized enterprises (MSMEs) without enough collateral to access loans from financial institutions. DBJ has now redesigned the CEF to better support these institutions in serving the MSME sector.
“We’re seeing where, with a product like the original iteration of the CEF, we were able to help some of our members who are entrepreneurs and who would not naturally have collateral to access loans through the support of the product,” said Linton.
“With this new iteration that has more flexibility and extended amounts for guarantees, I think we’ll be in a better position to help more of our members. We thank the DBJ for continuing to support this cohort of our membership who are looking for ways to expand and grow entrepreneurially.”
Reynolds said, “FHC is the first of the credit unions to have signed with us and I am particularly pleased. We know with this enhanced and improved CEF, it will make a significant difference for their small and medium-sized businesses and we look forward to working with them as we continue to make financing accessible.”
Project Manager of the CEF Portfolio Scheme Tracy-Ann McIntosh said this signing by FHC signals its commitment to the MSME sector. “First Heritage has definitely been bold and has been making strides in providing funding to the MSME community.
They have even moved from just micro and have been going into SME lending.” FHC SME Manager Kadian Dyke shared similar sentiments to her counterparts and said she looks forward to the new partnership contributing to the growth of FHC, DBJ and the Jamaican economy.
The improved CEF enables AFIs and MFIs to accept non-traditional collateral and grant coverage based on the borrower’s character and the future cash flow of the business.
The CEF will also be administered through an automated, electronic management information system to facilitate real-time approvals, speedy claims settlements as well as simplify administration and reporting by lending institutions.
It is available to viable enterprises and projects that earn less than $425 million in revenue per annum, are tax compliant and have a good credit history. The facility supplements existing collateral, allows MSMEs to access credit for expansion and reduces the risk for the AFIs and MFIs who are lending.
Since its inception in 2009, the CEF has facilitated loans for 568 MSMEs, totalling $7.82 billion, with 2,266 new jobs created to date.
The DBJ falls under the purview of the Ministry of Economic Growth and Job Creation, and is the lead development financing organisation in the country, with a core focus of providing financing options to entrepreneurs through all phases of development and the business life cycle.