Courts launches microfin business BlueStart
Courts Jamaica Limited has restructured its operations to create a new company called BlueStart Capital (Jamaica) Limited, under which it will conduct its microfinancing or loan business.
The loan business, more popularly known as Courts Ready Cash, was taken over by BlueStart Capital shortly after its formation in August 2021, in a bid to secure a licence from the Bank of Jamaica under the newly instituted Microcredit Act.
BlueStart Capital was officially launched on Thursday after becoming one of 13 institutions to be licensed by the BOJ to operate in the microfinance industry. However, it will still trade under the brand Courts Ready Cash.
Courts Ready Cash has been providing loans to Jamaicans since 2012. Its revenue base is largely made up of personal loans, but now that it has the BOJ’s stamp of approval, General Manager Atasha Bernard wants to beef up the business it does with self-employed individuals, along with small to medium size business operators.
“Whether it’s the man with the cookshop, a hairdresser, or someone that employs between five to ten people, we want to ensure that customers from that demographic are more included in our business,” Bernard told the Financial Gleaner during the company launch which took place at the Courts Jamaica head office in Kingston.
The company intends to leverage its network of over 47 physical contact points inside the Courts and Lucky Dollar Furniture Stores across the island. Additionally, the creation of a separate company gives Courts Ready Cash the back-office support it needs to grow the business.
Both Courts Jamaica and Lucky Dollar belong to the Unicomer Group.
“The goal is to eventually tap into our partners customer base. We are also working to bring our business to the customers instead of having them come to us,” Bernard said.
Bernard said management’s decision to boost business around self-employed and small to medium-sized business owners is also in part linked to the Microcredit Act, which limits microfin dealings with individuals to clients earning a maximum of $10 million.
The law also limits loans to businesses earning in excess of $425 million.
The Microcredit Act seeks to regulate microcredit institutions, provide greater financial inclusion, improved customer service and greater disclosure to customers. For Courts, the decision to continue operating as a microlender space meant a separation of the business, and a new limited liability company.
"That required a particular level of effort. They could have easily said it's too much work, but they did not take that route. in fact, during the whole process they have been extremely cooperative and complied with the policy objective of Government and for that reason I'm especially proud of the fact that BlueStart Capital is now licensed to operate in the microcredit space," Minister of Finance Nigel Clarke said at the launch.
Courts Ready Cash currently markets its business on fast approvals, no guarantors and no collateral on loans up to $1.5 million.
Over its decade of operation, the company has had much of its business built on customers of the Unicomer Group. But Bernard says the company is actively engaged in marketing campaigns to remove the misconception that only customers of the group can access loans.
“The latest statistics indicate that 17 per cent of the Jamaican population is unbanked or underbanked. This means that there is still a wide cross section of persons who are either unserved or underserved by commercial banks. We don’t want to have people thinking that you only can get a loan if you’re a customer of Courts because that’s not the case,” she said.
Jamaica’s microcredit industry is estimated to be made up of 200 microlenders, and so far, more than 100 have applied for a licence from the BOJ to operate in the formal system.