Uriel Dunkley got a $140,000 loan from the National Development Foundation of Jamaica (NDFJ) three years ago to improve his small bakery business, which was then limited to baking and selling cakes.
Since then, he has added buns and bread, pushing revenue from $15 million to $20 million a year. Two weeks ago he received another loan for $1.8 million from the NDFJ to buy much needed equipment.
"I have no plans to leave here (Jamaica)," Mr. Dunkley told NDFJ directors at last Thursday's Annual General Meeting (AGM) at Life of Jamaica Centre, New Kingston.
His plans, he said, was to increase revenue by an additional $10 million to $30 million next year.
His testimony pleased NDFJ Chairman Ryland Campbell who said that "it was good to know that we have people who recognise that we can make a success if we put our minds to it."
This is the good news. The bad news is that small business people seeking loans may not be given the same opportunity if the NDFJ's resources continue to decline.
Mr. Campbell had some sobering news for the audience at the AGM. Net profit for the financial year 1999 had declined by $6.2 million from the previous year, he said.
During the meeting, he put a positive spin on the downturn, telling directors that the reduced profit of $2.6 has kept the agency in the black.
"If we closely examine all the variables that contribute to making a profit...and we investigate the circumstances that caused several other companies to suffer fallouts around us over the last five years... we are delighted that we remain in the black which is more than can be said for several elements in this financial sector."
The year had been a rough one for the foundation, which, along with other financial services, had been under siege from redundancies, low loan demands and interest rates which averaged 33.9 per cent for the year. But what would essentially cripple the NDFJ's loaning ability was the increase in delinquent or outstanding loans. Total liabilities had gone down from $182 million to $161 million but delinquency on loans increased by 5.3 per cent. The amount loaned cumulatively at the end of the year stood at 7,437 loans with a value of $641.8 million.
"There still remains a large percentage of persons...based on our investigations... who have made up their minds to ignore the responsibility that they have taken on when borrowing money from financial institutions, "Mr. Campbell said. "We implore persons who are guilty of this practice to stop because in the long run, everybody suffers!"
Inspite of the challenges, Mr. Campbell boasted that the foundation had needed "no bailouts" and had met its main objective of providing financing to small and micro business operators to the tune of some $64.4 million, a decrease of only one per cent over 1998. The majority ($61.8 million) was allocated to the Regular Loan Programme while $2.1 million was loaned under the Micro Enterprise or Opportunity Knocks Programme.
The remaining $0.5 million was disbursed under Lease Financing.
But the number of loans approved (326) has gone down by some 38 per cent since 1998, culminating in a year end figure of $56.4 million in loan approvals. A further $11.2 million was accrued in loans which had been approved but not disbursed.
The Loan portfolio balance also experienced a decline, going from $304 million in 1998 to $287.5 million. At the end of the year net assets stood at $344.9 million, a decrease of $17 million.
However, the foundation continues to received loan funds, some $17 million in 1999: $2.6 million from the National Development Bank, $8.2 million from the Agriculture Credit Bank and $3 million from the Micro Investment Agency.
