We are constantly seeking solutions, in these uncertain times. Why are small and medium-sized enterprises missing out so badly on financing? The Inter-American Development Bank (IDB) has partnered with JMMB Bank (Jamaica) Limited to try to address this.
IDB Invest, a member of the IDB Group, signed an agreement with JMMB Bank (Jamaica) Limited, which will allow the bank to access US$35 million at a five-year tenor to facilitate increased financing to small and medium-sized enterprises (SME).
The project will increase the availability of long-term financing to JMMB Bank to support the growth of its SME lending, while contributing to the maturity and structure of its debt profile. It will also enhance the diversification of its funding sources, decreasing the dependence of shorter-term deposits, which will augur to the benefit of SME.
Access to finance for SMEs remains a challenge in Jamaica, despite this sector generating 80 percent of jobs and contributing significantly to the country’s gross domestic product, according to information from the Ministry of Industry, Commerce, Agriculture & Fisheries, 2019.
In addition to IDB Invest’s US$35 million loan, an additional loan of US$35 million will be mobilized by IDB Invest from international banks.
Jerome Smalling, CEO and executive director of JMMB Bank, shares “This partnership underscores our commitment to assist SME to scale and grow their businesses by providing holistic solutions to support them throughout their business life cycle, as we recognize that access to affordable financial solutions play a key role in business operation and growth.” He further added that the bank believes that this sector has tremendous growth potential and, in leveraging further support to the sector, the company is seeking to play its part in helping SME to realize their full potential and contribute even more to the country’s development.
The partnership will also see IDB Invest lending support to the bank on the development and implementation of an environmental and social management system. In addition, IDB Invest will provide advisory services to bolster internal capacity and an action plan to ensure that JMMB Bank’s human capital strategy attracts and retains the best talent pool.
Therese Turner-Jones, General Manager for IDB’s Caribbean Country Group and Jamaica’s Country Representative noted, “We are very proud to partner with JMMB—especially given their culture of inclusion, working especially with women and women entrepreneurs. Given the continued challenges being faced by SME during this COVID pandemic, this support will give the sector a greater level of buoyancy and help improve the livelihoods of many Jamaicans and their families who are experiencing untold hardship.”
Regarding this transaction, James Scriven, CEO of IDB Invest said: “At IDB Invest, we are pleased to close this transaction with JMMB Bank. This operation will allow small and medium-sized enterprises in Jamaica to have greater access to financing, which makes me proud as this is part of our commitment to strengthen and support the increase in credit financing for SME within the Caribbean region by generating more jobs and promoting their development.”
This agreement underscores the strong creditworthiness and capacity of JMMB Bank, which has been supported by its solid and stable financial performance.
This move is in keeping with the JMMB Group’s strategy to add value to its SME clients, through the provision of financial partnership, resources, innovative financial solutions and a network, throughout these businesses’ life cycles; thereby, providing the necessary support for growth and filling the gaps that currently exist in the financial sector. It builds on efforts being made by the JMMB Group, having opened the doors of its SME resource centers in Jamaica and Trinidad and Tobago, within the last year.
The JMMB SME Resource Centre is designed to help SME improve operational efficiency, lend expertise, and access resources, which will ultimately allow them to grow their businesses to the next stage of their life cycle. It provides coaching and a range of advisory services, including marketing, taxation, accounting, business plan writing and other general financial management and back office support, with the assistance of its partners and other organizations.
This deal can potentially contribute to five United Nations Sustainable Development Goals (SDGs): Gender Equality (SDG 5), Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9), Reduced Inequalities (SDG 10) and Responsible Consumption and Production (SDG 12).
About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $13.1 billion in asset management and 385 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
About JMMB Bank (Jamaica) Limited
JMMB Bank (Jamaica) Limited is the 6th largest commercial bank in Jamaica in terms of loans and deposits. The Bank has a diversified portfolio in Jamaica in terms of sector concentration, across retail client-base, corporates and small and medium-sized enterprises (SME), offering a wide range of financial solutions including deposits, loans, cambio services, investment banking and financial partnership. The JMMB Bank’s loan portfolio has outpaced the industry with growth of 48% in its loan portfolio, year-over-year, for the 2019/20 period ending March 31, 2020: totaling J$50.17 billion. This performance sets JMMB Bank ahead of the local banking industry’s 16.3% loan portfolio growth rate, over the same one-year period, even as the Bank has maintained one of the lowest non-performing loan ratios at 2.6%.