Wed | Jun 28, 2017

MSMEs disorganised

Published:Sunday | October 26, 2014 | 10:00 AM
Norman Grindley/Chief Photographer Lisa Taylor-Stone
Norman Grindley/Chief Photographer Valerie Veira
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With less than 20 per cent of micro, small and medium-sized enterprises (MSMEs) accessing loans through banks and credit unions during their lifetime, the government agency charged with supporting businesses in Jamaica says steps will have to be taken to assist these operators to access funding.

A needs assessment of 1,500 MSMEs across the island conducted by the Jamaica Business Development Corporation (JBDC) found that for St James, 17 per cent of players in the sector said they received a bank loan at start-up, during the course of the business or within the past two years.

The JBDC needs assessment for St James also found that 67 per cent of MSMEs use their profit as a major source of financing after start-up, and at least 50 per cent use their personal savings as funding sources over the life of the business.

APPROPRIATE PRODUCT

According to the JBDC, given the situation, the Development Bank of Jamaica should consider creating an appropriate and equitable product in response to the continuous need for capital and within the MSME sector.

However, the survey found that only 24 per cent of MSMEs in St James are knowledgeable about organisations that offer support to players in the sector, and 32 per cent of this number accessed service through these organisations within the last three years.

Addressing a Gleaner Editors' Forum last week, Valerie Viera, chief executive officer of the JBDC, said the needs assessment gives great insight of the problems on the ground and indicates the areas in need of attention.

"We have shared the information with our partner agencies - private and public - that will develop programmes that will be presented at the business clinic," said Viera.

PREMIER OBJECTIVE

The JBDC, which is an agency of the Ministry of Industry, Investment and Commerce, is to embark on a three-year project called the national Mobile Business Clinic Initiative (MBCI), which has as its premier objective diagnosing the state of MSMEs on the island and offering prescription for enhanced growth.

The MBCI will kick off on November 4 in St James.

Viera said that among the things that the business clinic will seek to teach entrepreneurs is what it means to be in business.

"A lot of preparation needs to be done; you have to understand what it means to be in business as different from doing a hustling until something else come by," she said.

In the meantime, Lisa Taylor-Stone, manager of projects and research at the JBDC, said that more than 80 per cent of participants in the needs assessment indicated they want to expand their businesses either moderately or rapidly by 2016.

The needs assessment found that 70 per cent of MSMEs did not start out with a business plan and 20 per cent put in place a business plan after the business got off the ground.

Some 78 per cent of the MSMEs in St James do not have marketing plans, the study also found.