Sunday 8 December, 2019

PSOJ to examine credit models for high-risk SMEs

L-R: Nadeen Matthews Blair, Chief Digital and Marketing Officer at NCB, Septimus “Bob” Blake CEO of National Commercial Bank, Keith Duncan President of the Private Sector Organisation of Jamaica and Michelle Toyloy-Carter Chief Operating Officer, Credit Information Services greeting each other as they anticipate the start a recent workshop.

L-R: Nadeen Matthews Blair, Chief Digital and Marketing Officer at NCB, Septimus “Bob” Blake CEO of National Commercial Bank, Keith Duncan President of the Private Sector Organisation of Jamaica and Michelle Toyloy-Carter Chief Operating Officer, Credit Information Services greeting each other as they anticipate the start a recent workshop.

Private Sector Organisation of Jamaica (PSOJ) has committed to brainstorming ideas around the incorporation of new credit models for high-risk small and medium-sized enterprises (SMEs) as the third step in a five-part workshop series.

Last Friday, PSOJ concluded its second workshop under the theme “Partnership for SME Empowerment” under its recently launched Access to Finance Facilitation Panel (AFFP) for SMEs.

The initiative brought together bank CEOs, loan originators, credit risk specialists, regulators as well as representatives from the credit bureaus, the Development Bank of Jamaica (DBJ), and the Ministry of Industry, Commerce, Agriculture and Fisheries.

“We have a unique opportunity here. For the first time, the stars are aligned. All the players in the ecosystem are together. So let’s work together,” Programme Director of the AFFP Nevada Powe said during the meeting.

The next workshop is slated for January 2020 and will focus on credit adjudication and risk assessment. It is targeting microfinance institutions and credit unions in leading the charge.

PSOJ’s Access to Finance Facilitation Panel for SMEs was launched in June with a vision to assist MSMEs in accessing credit. The initiative was born out of a vigorous debate in December, between MSME Alliance President, Donovan Wignall, and former Jamaica Bankers Association President, David Noel.

Ultimately, the financial industry giants hope to create products, solutions, platforms, and processes that are “fit for purpose”.

They will seek to take into consideration accounts receivables as collateral, the creation of a dedicated SME section on most financial institutions’ websites, more friendly SME credit adjudication processes, increased access to the DBJ’s credit enhancement facility and the inclusion of more MSMEs in credit bureaus’ databases.

Little over a week ago, the DBJ announced a $40 billion increase in the loan pool for the Credit Enhancement Fund to total $45 billion available to date to SMEs through financial institutions and microcredit operators.

CEF is a partial loan guarantee for the businesses without the required collateral to access loans.

 “2020: New Decade, Clear Vision,” PSOJ President Keith Duncan said on Friday. “This collaboration demonstrates what is possible for Jamaica when we have fixity of purpose; the goal is to meet the unmet demand of SMEs. The result will be increased economic activity and greater financial inclusion.”

“We cannot take outdated, non-performing laws, processes and approaches into this new decade.  We have a golden opportunity for a paradigm shift that will have a ripple effect, one that will be experienced for decades to come,” he continued.

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