Tue | Aug 22, 2017

GKMS enters microlending market

Published:Sunday | April 2, 2017 | 4:00 AMNeville Graham
Grace Burnett, CEO, GK Financial Group.
Don Wehby, Group Chief Executive Officer, GraceKennedy Limited.
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GraceKennedy Money (GKMS) Services is expanding into a new arena as a moneylender, a market segment that offers immediate loans in small quantities that are expensively priced to offset the risk.

Last October, GK Investments Limited got the green light from the Ministry of Finance to offer loans at up to 52 per cent per annum, under the Money Lending Act, according to a gazetted order.

The conglomerate says its micro-lending operation will not have its own infrastructure, but will be executed through networks managed under subsidiary GKMS.

"This is part of the vision we have at Grace where we want to be an integrated financial services company, that is to say our insurance company, our bank and our money services," GraceKennedy Group CEO Don Wehby told Gleaner Business.

The company also wants to tie a segment of its insurance operation to the money services network, through a specially designed product.

GraceKennedy Limited is a food and financial services conglomerate with operations that span several regions of the world. Its financial operations, which delivers most of the profit for the group, include commercial banking, remittances and other money services, insurance and now microfinance.

The conglomerate is split into two main divisions - GK Investments and GK Food.

Wehby said GK Investments, whose boss Steven Whittingham is known for doing the heavy lifting in structuring deals, was in charge of the set up for the launch into the microlending market.

 

MICROINSURANCE OFFERINGS

 

"Through that, we will be leveraging our GKMS/Western Union/Bill Express money services network by offering more services throughout, so that we will be in a position to offer consumer services through micro-lending. In addition, we will be offering microinsurance," Wehby said.

Through GK Insurance Company, previously known as JIIC, GraceKennedy launched seriously into the microinsurance market four to five years ago.

According to Grace Burnett, CEO of GK Financial Group, more products are on the way to further tie into the money services operation. GKMS will begin rolling them out starting April 1, Burnett said.

"We have about seven micro insurance products, with one of the most exciting ones coming being that our remittance customers can buy microinsurance to protect their remittances," Burnett said.

The product called Remittance Continuity will be offered at all Western Union outlets, she said.

GraceKennedy's first known microinsurance product in 2012, BillProtect, was tied to its bill services operation. The next year, it rolled out a medical insurance product called GK-Amed to cover medical tests and some procedures, and a weather-related livelihood protection policy.

GK also now sells SmartProtect to cover mobile devices against damage or theft, and gap insurance to cover motor vehicle depreciation, especially for loan arrangements.

GKMS is looking to have a full rollout in for the integrated services in the next few months.

"Yes we're definitely looking for an end of third-quarter implementation," said Wehby. "We're trying to fine-tune the technology so that we can automate some of the systems."

As to the size of the investment being made, Wehby said the expenditure was spread group-wide and as a such was would require time to compute.

GKMS oversees 150 Western Union/Bill Express outlets across Jamaica.

neville.graham@gleanerjm.com