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JMMB Merchant Bank creates customised solutions to grow SMEs

Published:Friday | February 5, 2016 | 1:58 PM
Michele Gabay (right), Managing Director, MAPCO Printers Ltd demonstrates some of the key functionalities afforded by the, then, recently commissioned press, to a delighted Julian Robinson (left), Minister of State, Science, Technology, Energy and Mining.

Although private large corporations continue to receive the lion’s share of loan financing, according to the BOJ’s Credit Conditions Survey published in June, 2015, small and medium-sized enterprises are seeing more financing opportunities being made available, by local financial institutions. The SME sector has seen a marginal 2% increase in the amount of business loans allocated year-over-year; now totaling 29%. JMMB Merchant Bank (JMMBMB) is one of the local banks that have been supporting this sector with its customized financing solutions. 

“One size does not fit all” best defines the approach taken by JMMB Merchant Bank (JMMBMB) in providing financing solutions for small and medium-sized enterprises (SMEs). Damion Hylton, Head, Corporate and Commercial Banking, JMMB Merchant Bank, notes, “The Bank refrains from creating loan packages with pre-determined terms and conditions, but instead employs a solutions-based approach with all prospective clients, wherein we examine each    entrepreneur’s proposal for its own merit, and do the           necessary follow-up. Our focus is to always address the root cause of financial challenges, so that the business has a firm   foundation and can be poised for growth.” JMMBMB also provides customized repayment periods and credit facilities to match the business’ cash flows.

In attesting to the involvement of the JMMBMB’s corporate team throughout the process, Michele Gabay, Managing Director (MD), MAPCO Printers Limited, highlighted, “I really appreciated that the JMMBMB team met with me and my team, so that they could understand my business, and saw firsthand my business operations. This is not typical, as bankers usually only review a potential client solely on the documents presented. The difference brought by the JMMBMB team of sitting, talking and viewing my operations made a big difference and solidified the relationship.”

Damion Hylton added that his corporate team believes that a part of the assessment process, is getting a firsthand understanding of the documentation presented as this also provides valuable insight and further informs the review process.

MAPCO’s Success

Through the established financial partnership with JMMB Merchant Bank, MAPCO was able to access J$79M through a Development Bank of Jamaica-backed loan facilitated by JMMBMB, to finance a part of the over J$110M retooling exercise. This retooling exercise has resulted in a boost in sales from 7.25% to 24.8%, when compared to the prior period. Gabay in describing the application process outlined, “Although we faced challenges throughout the process, we appreciated the responsiveness of the JMMBMB team in keeping us informed along the way, providing recommendations and supporting MAPCO to ensure that we could successfully modernize our facilities and increase the business’ competitive advantage.” Additionally, since receiving financing through JMMBMB, MAPCO has seen improvement in its business operations, which has resulted in increased capacity, reduction in overtime payments and other related operational costs.

The MAPCO MD commended the JMMBMB corporate team for being an ongoing partner throughout her company’s successes so far. Adding, “members of the corporate team even attended the launch and installation of the new equipment we purchased.” Hylton notes that this partnership is not unique to MAPCO; instead it is their distinctive approach. His team has also supported several other companies; one such is Rapsody Tours, Cruise and Charter Limited, a marine tour company which is based in Montego Bay. Through a fruitful partnership, the company has grown its fleet from one catamaran to five, and has expanded its operations across several geographic locations over the last 15 years.
Hylton adds, “JMMBMB has an ongoing partnership with its clients as it recognizes that, as these businesses grow, they will have varying financial needs and JMMBMB wants to continue to assist these clients to achieve their goals.” 

The Process

In expounding on the financing process, Hylton outlines, “The process involves a review of the business’ proposal and documentation, followed by careful discussion with key members of the company’s team to assess the business model and performance, so that the most holistic financial solution can be provided.”  He adds, “Provision of the relevant documentation is an important part of the process, as it allows the process to be seamless and assists the team in reviewing the loan’s merit, on a case-by-case basis.”

He further shares that the JMMBMB team further supports the loan process, by helping clients to develop business and financial plans and access cheaper loan facilities, through entities such as Development Bank of Jamaica (DBJ) and Export-Import (EXIM) Bank.  JMMBMB provides loans to SMEs to meet their varying needs including: optimizing cash flow; financing growth; mitigating risks from receivables; debt consolidation; and financing the start-up phase.

Eyeing New Frontiers

Hylton reveals that the JMMBMB corporate and commercial banking arm is aiming for over 30% growth in its loan portfolio, by the end of the 2015/16 financial year, with the   offerings being provided. Currently, companies can access fixed asset loans that are secured by specialized equipment, whether that equipment is held and/or being acquired, to facilitate retooling and enhanced competitiveness, or unsecured business loans. In addition to loan financing from JMMBMB, potential clients can gain access to a team of experts to provide investment solutions, cambio, capital market transactions (including sale and leaseback, IPOs and private placement), in addition to commercial insurance, through the JMMB Group.

Hylton further outlines that the JMMBMB corporate team will continue to finance manufacturing companies like MAPCO. He adds, “We believe that manufacturing and new ventures are two critical areas that are not traditionally targeted by financial institutions, in a manner that both minimizes frustration on the part of those entrepreneurs and fosters growth. Therefore, we have customized financing for newly-registered businesses that are no older than 18 months.” Manufacturing remains a sector that JMMBMB intends to continue tapping for new business; while eyeing the tourism, distribution, petroleum and construction and land development sectors, as potential “sweet spots,” to further grow its loan portfolio.

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