Tue | Oct 24, 2017

Expanding Dolla Financial eyes IPO after buying western start-up

Published:Friday | July 28, 2017 | 12:00 AMHuntley Medley
Kadeen Mairs, CEO of Dolla Financial

Dolla Financial Services, the three year-old microfinance and cambio outfit of Stocks and Securities Limited (SSL), is weighing an initial public offering (IPO in the medium to long-term.

However, when pressed for details on the size of the equity capital being targetted, its chief executive officer, Kadeen Mairs, who has been on the job for under a year, says the numbers are still being crunched.

In August last year, Mairs sold M24 Investments - a microfinance company he started in Lucea, Hanover in 2014 when he was 24 years old - to securities dealer SSL.

The micro loan portfolio of the western Jamaica-based start-up was rolled into Dolla Financial and Mairs tapped to lead the entity. With his clientele and leadership talent on board, SSL, a securities dealer, has been expanding its three year-old subsidiary that provides cambio, remittance, cheque cashing, loans and bill payment services.

In less than a year, since the acquisition, Dolla Financial has opened three branches in Mairs' old stomping ground of the western belt of the island with new locations in Montego Bay, Savanna-la-Mar and Lucea joining the Discovery Bay outlet and Corporate Area operations at Barbican Business Centre.

The IPO is being contemplated to fund the company's planned roll out of new financial products which it is said to be in the process of pioneering, grow its loan book and step up its brand awareness.

While being guarded about the new products in the pipeline, Mairs let on that the farming community was under the microscope and his outfit has started research into the benefits of micro insurance for that sector. The bread basket zone of the south coast, including Manchester and St Elizabeth, is being targeted for the next phase of Dolla's expansion.

Micro loans to underserved market of informal businesses will be the primary product for St Elizabeth, Dolla's next branch location.

"These business people are most in need of credit because as soon as the top micro finance institutions get big they forget about the little man who made them big, and Dolla will not make that mistake," he said.

With this approach, micro businesses and small and medium enterprises stand out as sectors to drive the current and next growth spurts for Dolla Financial. Mairs believes the expertise he has developed in the microfinance business as well as his knowledge and cornering of the western Jamaica market would have figured in the bid by SSL for M4.

Emotionally attached

He said selling the business he started from scratch with $700,000 in savings and $1.5 million in loans from Scotiabank and his then workplace, National Commercial Bank, was a difficult decision.

He added that it was only natural to get emotionally attached to a business he started with "me alone in a little office in Lucea with a desk, a chair and a printer" while living at his mother's house to save cash. "However, business is business and you have to separate business from emotions."

Having grown M24 Investments over its two years of operation from a clientele made up almost entirely of a few taxi operators in Lucea, to a recognised microfinance firm boasting 200 clients and revenues of just under $10 million, Mairs said he recognised he would need strategic partnerships to take the business to the next level.

"I realised that I couldn't do it alone. Selling was a good business decision," he said, while being guarded about the sale price. "I needed to grow as an entrepreneur and Dolla needed an entrepreneur to grow the business."

The growth of M24 Investments was assisted by a loan of $2 million from two private investors along the way. With that Mairs was able to move into a bigger office, relocate from the outskirts of Lucea into the heart of the town, and take on his first staff member who had also worked in banking.

Strategic marketing and branding activities not only in western Jamaica, but also Kingston, helped the fledgling company catch the eye of others in the corporate world.

Mairs considers it an achievement that he managed to keep delinquency in a risky business to below 15 per cent for M24 at the point of its sale to SSL.

"When I started the business, lending amounts up to $50,000 for six months at between two and three per cent interest per week, and clients wouldn't pay back, I would cry," recalled the Mannings High School and Montego Bay Community College business studies graduate who went on to earn his MBA part time at the University of Technology western campus while working as a teller supervisor with NCB.

What was the driving force that led him into business? "I recognised my potential in sales and I said if I could do it for the bank then I could do it for myself but what I would really I need is the capital," Mairs explained. While working and studying he wrote the business plan, placed school on hold to build us some savings and scouted for financing.

"As a young man in business I want to be an example especially to other young men," Mairs shared, noting that his professional journey has not been easy, but one with several job application rejections, disappointments and personal wrong choices, but made possible ultimately by discipline, focus, preparation and persistence.

"When I started working my goal was to be the bank manager. Along the way I realised I could own the bank," he quipped.

Mairs grew up in Westmoreland, at different times living with his single mother in Grange Hill and then his grandmother in Harford during his high school and college years when his mother migrated to the United Kingdom in search of a better life and resources to assist with his education.

huntely.medley@gleanerjm.com