Government of Jamaica Exploring Feasibility Of Utilizing Accounts Receivables Asset-Based Financing As A Funding Option For Micro, Small And Medium-Size Enterprises
The Government of Jamaica is exploring the feasibility of utilizing accounts receivables asset-based financing as a funding option for micro, small and medium-size enterprises (MSMEs).
The concept allows business owners to access capital that is secured by outstanding invoices or money owed by clients procuring goods and services on credit.
Minister of Finance and the Public Service, Dr. Nigel Clarke, says a cross entity team has been appointed to analyse the issue, to enable receivables to be a more mainstream product in our financial space.
The body comprises representatives of the Bank of Jamaica (BOJ), Financial Services Commission (FSC) and Development Bank of Jamaica (DBJ).
Dr. Clarke pointed out that in developed economies, receivables financing is a major component of the financing space.
He was speaking on the final day of a three-day regional MSME conference, hosted by the Small Business Association of Jamaica (SBAJ), at the Jamaica Pegasus Hotel in New Kingston last week.
Meanwhile, Dr. Clarke noted that progress has been made to enable small businesses to obtain financing.
This includes a special window for micro businesses with revenues under $10 million to access small loans, and a $1.5 billion fund managed by the DBJ.
He said he was working out with the team at the Finance Ministry, exactly what the modality is going to be in relation to the special window, that is, which entity small businesses will have to go through.
The intention is that small businesses which meet the revenue threshold, will be able to access these funds he said
Dr. Clarke assured small business stakeholders that the ecosystem will be created to ensure their sustainability.