General manager of the Jamaica National Building Society (JNBS) Earl Jarrett (right) with Mosina Jordan, mission director of the United States Agency for International Development (USAID), during yesterday's signing of a technical agreement to finance microbusinesses between USAID and JNBS in Kingston. - Michael SloleyTHE UNITED States government yesterday granted US$1.2 million (just less than J$50 million) to the Jamaica National Building Society (JNBS) group to finance the island's microbusiness sector.
The funds, which are being given through the United States Agency for International Development (USAID), will go to the JN Micro Credit Company to aid projects under a Micro Enterprise Development Programme. The programme aims to increase employment opportunities for the economically disadvantaged in the island.
Under a technical agreement, signed yesterday at the Gleaner Company Limited, the JN Micro Credit Company, formed last August with the loan portfolio of the defunct Workers' Bank, will provide short-term loans between $5,000 and $120,000 to entrepreneurs who require help to expand existing small and micro enterprises. The programme is expected to cover all parishes by 2004.
"This will clear the way for individuals who prior to now had a difficulty obtaining credit (through the formal system). This is beneficial because we expect the growth in the economy to come from micro enterprises," said JNBS' general manager, Earl Jarrett.
He said any profit made would be plunged back into the JN Foundation, which helps Jamaicans with access to services such as housing so "individuals will benefit along a long chain".
Mossina Jordan, USAID's mission director, was upbeat about the programme.
Referring to USAID's 30-year relationship with development in Jamaica, she was happy that especially micro-entrepreneurs in rural areas, "where poverty is so prevalent", would get assistance through JNBS's 18 branches as well through the company's collaboration with post offices.
"It is encouraging to see the formal financial sector reaching out to businesses of this size," she said, using the example of a 72-year-old owner of a small shop who had not been able to get a traditional bank loan because she did not qualify but who saw her profits jump from $6,000 weekly to $62,000 after being given a number of micro loans from USAID.
Applicants for the scheme need to be 18 years old and over, be the owner of an active and profitable business for at least one year, live and operate a business in the region in which they obtain the loan, live near a post office and provide security or collateral in the form of receipts for household items such as fridges, stoves and component sets or tools used in their businesses.
First time borrowers can borrow up to $20,000 and must repay the loans given for up to 2 1/2 months with small weekly payments. Repeat participation and faithful repayment can lead to larger loans for up to 40 weeks.
