ONLY ABOUT five per cent of the country's estimated 200,000 low-income entrepreneurs have access to credit. This estimate has come from Basil Naar, the General Manager of Churches Co-operative Credit Union, one of Jamaica's largest, as he made a pitch for increasing loan financing to the micro enterprise sector.
Any injection of capital for the creation and growth of micro enterprises would be a plus for the overall economy and would help to defeat "the unholy trinity of poverty, violence and hopelessness that is plaguing the country". Mr. Naar's recommendation is for profitable larger businesses to assist in providing financing for micro enterprises as a sound social investment in securing their own future against the deterioration produced by the unholy trinity.
In last Friday's issue of the Financial Gleaner in which we reported the credit union manager's proposal, we ran a story, 'Doing good by doing well', on investments made in 'social entrepreneurship' by Jeff Skoll a co-founder of eBay, the Internet's most popular and successful auction site. Through the Skoll Foundation and the Centre for Social Entrepreneurship at Oxford University, Skoll is investing in social entrepreneurship which combines business and assistance to the less able in society.
Many companies here are heavily involved with the more philanthropic side of doing good through contributions to welfare-type and social development causes. Basil Naar is calling for direct investments in the creation and growth of micro enterprises by businesses which have themselves enjoyed success. Just one per cent of the estimated $400 billion invested in 'paper', or $400 million, would more than provide the necessary financing, Mr. Naar estimates.
As usual with these recommendations, the details of mechanism are left to be worked out. The issues of risk and security are the usual big bugbears in financing for micro enterprises. But the potential benefits to the national economy and social order in which all businesses must operate and all local investors live makes sustained investment of local capital in micro enterprises an attractive proposition.
The credit union movement itself was founded precisely on the principle of members pooling financial resources to help each other. With that philosophy and the accumulated experience of operation perhaps the credit union movement could serve as the vehicle for mobilising and managing the capital, a mere $400 million, for the social entrepreneurship which one of the leaders of the movement has called for. Enlightened self-interest recommends the support of profitable larger enterprises.
THE OPINIONS ON THIS PAGE, EXCEPT FOR THE ABOVE, DO NOT NECESSARILY REFLECT THE VIEWS OF THE GLEANER.
