Development Bank of Jamaica

In Jamaica, as in many other countries worldwide, small and medium-sized enterprises (SME) far outnumber large conglomerates and corporations. As a result, it is universally recognized and accepted that SMEs are the main engine of economic growth because they employ more people, are more innovative and provide more competition in the marketplace.

According to statistics published by the Planning Institute of Jamaica, SMEs are involved mostly in trading, construction, services, light manufacturing, agriculture and entertainment. During 2006, these SMEs continued to play a significant role in reducing the numbers of the unemployed and represented 90.8 per cent of all firms involved in various types of activities that made General Consumption Tax returns.

In spite of their importance to the economy and the well-being of millions of Jamaicans, SMEs often find it very difficult to access funding for start ups, upgrades or capital expansion. This is especially true for SMEs involved in agriculture and manufacturing. Traditional lending institutions are reluctant to finance farmers, who are exposed to the vagaries of the increasingly unpredictable weather, and to small manufacturers whose markets have become unstable due to the financial insecurities of the developed economies. This is a gap that the Development Bank of Jamaica can fill.

DBJ has several funding programmes amounting to several billion Jamaican dollars for SMEs with all sizes of projects and entities across the productive sector. If your business is in agriculture, agri-business, manufacturing, mining, tourism (hotels and attractions) or services you can access one of our seven lines of credit developed specifically for SMEs. The lines and interest rates include:

• The $1-billion DBJ-Petrocaribe Small and Medium-sized Energy Fund at 10% per annum
• The $1-billion Small and Medium-sized Enterprises Development line of credit at 10% p.a.
• The $250-Million Modernization of Agriculture and Agro-processing line of credit at 7.875% p.a.
• The $100-Million DBJ/Combined Disabilities Association Special Line of Credit for disabled entrepreneurs at 10% p.a.
• The $50-Million Fishermen’s Revolving Loan Scheme at 7.875% p.a.
The $50-Million Revitalization of Dairy Sub-sector line of credit at 4% p.a.

In addition to these lines of credit, there is the DBJ Regular line which is available at 13% p.a.

Getting a DBJ loan

DBJ does not administer the loan applications directly. Instead, the Bank has established relationships with Approved Financial Institutions (AFI) which lend the funds on its behalf. AFIs include the National People’s Co-operative Bank, commercial banks and merchant banks, credit unions and Jamaica National Small Business Loans Limited.

DBJ provides the wholesale funds at subsidized rates to the AFIs with specific criteria for target sectors instructions. The interest rates, which are the lowest available anywhere in Jamaica, range from 4% to 10% and are fixed for the life of the loans.

The first step

The first step in the process is for you to go to your bank, credit union or micro-financing institution with your business plan. Tell them that you wish to access a DBJ line of credit and provide the documentation they request of you. The Jamaica Business Development Centre can assist you to develop a business plan at a minimal cost.

The National People’s Co-operative Bank (NPCB) – which has 38 branches around the island - also services the SME sector.

If you would like additional information, please contact Milverton Reynolds, DBJ’s Managing Director, or Yvonne Lewars, General Manager for the AFI Relationship Division, at the Development Bank of Jamaica, 11a-15 Oxford Road, Kingston 5. Telephone: 929-9400.

December 2, 2008