Getting storm recovery aid to small entrepreneurs is complicated – JAMFIN

Providing support to the smallest of small businesses, even in a time of crisis, is not easy to do, even with the best of intentions. That’s because the population of microbusinesses span a gamut of solopreneurs and cottage operations – many of which are unregistered, with no presence and mostly no representation.

So while long-time lobbyist for the microfinancing sector, Dr Blossom O’Meally-Nelson, has knocked the government for generally being slow to offer assistance to small and microbusiness operators in the wake of Hurricane Melissa, she also noted that pinpointing those who need the help is one of the challenges faced by the authorities because of the absence of a database that captures the population of small ventures and entrepreneurs.

This could be addressed by offering small entrepreneurs a grant to be registered with the government, as an initial step, as posited by O’Meally-Nelson in her capacity as chairman of Jamaica Association of Micro Financing Limited, better known as JAMFIN.

“I have been recommending for years that we need to do a simple registration programme in which each person gets a card and grant of $5,000, whether it’s the handcart man or the man fixing lawnmowers,” she said in an interview with the Financial Gleaner.

“If everybody gives you their name and address and the service they provide, that’s all you need to know to begin with. Then you have a database and you can work from there.”

The JAMFIN chairman has welcomed the proposed $10-billion M5 business recovery programme announced by the Development Bank of Jamaica, a government agency, to assist small and microbusinesses affected by the hurricane.

There has been confusion around that programme, which was not captured in the country’s revised national budget, post-hurricane, but the upshot is the funds are to be deployed over time, around three years, and are expected to be backed by the Jamaican government and donor agencies.

More immediate assistance, about $1 billion, is already flowing directly from DBJ’s own coffers. Another $3 billion has been approved by Cabinet, just not in time to be reflected in the revised budget. More funds are therefore scheduled to be distributed starting in the final quarter of the current fiscal year, that is, January-March 2026.

O’Meally-Nelson warned, however, that the programme would not address the entirety of the problems besetting the sector because many MSMEs are not registered and therefore would not qualify for help.

“A large portion of the personal loans provided by microfinance companies are put into small businesses. For example, if someone takes a loan to buy a pickup, it is a personal loan but it is used in the business. So there is an overlap there for which there is no data in the Bank of Jamaica or the Ministry of Finance,” O’Meally-Nelson said.

Under the DBJ’s M5 programme, funds will be made available to refinance, reboot and rebuild businesses affected by natural disasters.

Microfinance companies with operations and borrowers at the western end of Jamaica were themselves affected by the storm, but the degree of the fallout is unknown. Their regulator, the Bank of Jamaica, is yet to respond to queries on its assessments of Hurricane Melissa’s impact on the microlending sector.

O’Meally-Nelson said JAMFIN has 18 members, as well as about 100 followers, meaning microfinance companies to which the association also provides services.

JAMFIN itself is still gathering information from its members about the impact of the hurricane which hit Jamaica on October 28. Some of its member companies’ branches in western Jamaica were forced to close after the catastrophic event and has not reopened since, she said.

The association is coordinating with members to help restructure their offerings, giving preference to business loans over personal loans.

“We are trying to design the type of loans that can help businesses to restart, while at the same time reducing the risk to the microfinance company,” O’Meally Nelson said.

“The microfinance institutions are talking with their clients, giving them loan extensions and not being so rigorous with collections at this time. But they need the money (from the DBJ) to on-lend, and they need a context in which they can share the risk.”

Speaking at a JMMB Thought Leadership forum last Thursday, DBJ’s Managing Director, Dr David Lowe, said the $1 billion currently being deployed by the development bank will provide immediate liquidity to micro, small and medium-sized enterprises.

luke.douglas@gleanerjm.com