Hyde sees consistent demand for microcredit in 2018
JN Small Business Loans Limited, JNSBL, is predicting growth in new loans within a range of 30-40 per cent, based on the demand for credit and consistent with previous trends.
The microlender wrote $4.2 billion of new loans in fiscal 2017, and a realisation of the predicted level of new business would push the value above $5 billion.
"We will seek to outdo our current performance," JNSBL General Manager Gillian Hyde told the Financial Gleaner.
New services to be rolled out in 2018, she said, included health and other products developed within the wider JN Group.
"We aim to ensure that savings habits are developed, and investment made in education, healthcare, and so on, are well embedded into the development of our clientele. We are going to be leveraging the assets in Jamaica National with a view of doing just that," Hyde said.
JNSBL is considered the premier micro and small business institution in Jamaica, outflanking rivals such as Access Financial Services, as well as Lasco Financial Service, which swallowed another microlender - Scotia Jamaica Microfinance Company Limited, which traded as CrediScotia - in a deal that closed at the top of this month.
Many private players
The microfinancing sector has a lot a players, but most of them are privately held. However, Access and Lasco Financial - both of which are publicly listed on the stock market, which requires them to disclose their accounts - make annual income of $1.4 billion, and $1.07 billion, respectively, based on their fiscal 2017 disclosures. Access is valued at $3.1 billion by assets, while Lasco Financial's assets are half that at $1.5 billion, prior to the CrediScotia deal.
"The MFI industry does not have a single-data house, and so it is difficult to accurately position ourselves in respect of asset value. However, JNSBL is recognised as one of the country's leading microfinance institutions, with an asset base of $2.7 billion as at the end of March 2017," Hyde said.
"Over the last three years, we have been growing an average of 30 and 40 per cent. We think that we will continue to do so based on the demand for loans."
In its last fiscal year, JNSBL disbursed 26,543 new loans, which the GM said helped to support more than 100,000 jobs. New business grew 27 per cent in that year.
The company "consolidated in the sector through partnerships" with Development Bank of Jamaica, EXIM Bank, Micro Investment Development Agency, USAID, National Insurance Fund, Tourism Enhancement Fund and other agencies.
Loans were distributed across several sectors, including retail and distribution, services, agriculture, tourism, and manufacturing.
In fiscal 2016, the lender disbursed 23,050 loans valued at $3.3 billion.
Loan rates vary across all product lines, with special consideration for concessionary loans under public private partnerships, which Hyde said are available at five per cent, as well as reducing balance facilities.
"We also have to price loans with consideration for those in more 'at risk' categories as well as those using non-traditional forms of collateral. Those rates are typically quoted weekly, offering flexibility of very short term facilities - as low as 10 weeks - and having weekly payments," she said.
Hyde attributes some of JNSBL's success in a market that is deemed high risk to the personal touch that its loan officers bring to the job.
"I want to point out that key to the micro sector in particular, which is the bulk of our portfolio, is a strong client-centred and client-focused organisation where persons are very close to clients," she said. That loan segment includes clientele in the haircare market - barbers and hairdressers.
"When I do visit and observe them [competitors], my assumption is that we do have a lot more staff here and so the ratio of client to team member may be a little stronger on the JNSBL side. What I can confirm is that it really requires a very strong relationship between our client relations officer and the client. They have to be very, very in touch in terms of what is happening in the business as well as giving an ear to what is happening personally," the JNSBL boss said.