Pengelley to deliver restructuring plan for micro agencies
The Brian Pengelley-led micro agency board is to formulate a plan for the eventual merger of the Jamaica Business Development Corporation (JBDC), the Micro Investment Development Agency (MIDA), and the Self-Start Fund (SSF) into one body.
The merger of the three boards, with Pengelley as chairman, is just the beginning of the process, according to Minister of Industry Investment and Commerce Anthony Hylton.
"What we are proposing is that all three need to focus their activity and work in sync to illuminate overlaps and have a seamless set of support to the MSME sector," Hylton told Sunday Business.
"There is need to integrate resources - human and otherwise," he said.
The oldest of the agencies, the SSF, was developed in 1983 to be the Government's "prime retailer" of funding to MSMEs.
MIDA provides wholesale funding to entrepreneurs along with business-support services in networking and non-financial support and was established in 1991.
The JBDC was established in 2003 to assist start-ups with product development, technical assistance in crafting business plans and proposals, and consultancy advice for established businesses, among other things.
While the final structure is still being finalised, the ministry pointed to some goals of the merger.
"The capacity of the Self-Start Fund would be improved to transition from a trading-based high-interest loans regime to a productive sector-based low-interest loans regime," it said.
The portfolios of the lending agencies are highly skewed and biased against the productive sector and in favour of trading or commercial activities, the ministry added.
MIDA will effectively transition to a fund manager and would "also expand the role of its Monitoring and Debt Recovery Unit (DRUM) unit to take on the debt monitoring and recover services of all government micro-financing agencies.
The JBDC will focus more on its business advisory and product-development services. It will also facilitate certification training and standards-based product development, the ministry said.
"The merged board's mandate is to rationalise the activities of the institutions because there were (overlaps)," Hylton said.
"The question for the management to now determine is: What is the nature of the merger that takes place? Is it that we have one broad umbrella with separate windows, or you have a full-fledged merger?" the minister said.
How soon the merger will happen is unclear. There is no set time frame, Hylton said, as the new board will have to undertake a complete review of each agency.