Banks are often times the first place to which the budding entrepreneur will turn to when contemplating financing for a small or medium enterprise. However the range of goods and services that a commercial bank can offer far exceed merely loan offerings, even if that is the most logical or likely place to start.

The role of the SME in Jamaica and the Caribbean is so large that its importance to the economy cannot be overstated or ignored. The statistics are well known and often cited.  In most developed countries around the world and in the Caribbean, Small Businesses or Micro and Medium Sized Enterprises are estimated to account for anywhere from 50% to 70% of total employment.  While large corporations make news and get the media attention, it is small businesses that drive the economy, innovation, entrepreneurship, risk taking and employment.

This fact has not been lost on the commercial banking sector, which has led them to expand the range of goods and services they offer to SMEs to the point of offering dedicated and specialized services to SMEs.  Some are among Jamaica’s biggest and most instantly recognizable commercial banks including National Commercial Bank, The Scotia Group and the Jamaica National Building Society (which has both commercial banking and building society core functions).

Bernadette Barrow, head of the NCB SME Unit.

The National Commercial Bank credits itself as the first commercial bank to focus on small and medium enterprises and asserts that they can assist them to achieve growth. NCB’s SME Unit offers a wide variety of products and services including financing, cash management, credit cards and electronic banking.  The SME Unit is comprised of locally based business bankers, who are supported by Branch Managers in NCB’s branches islandwide.

Its suite of business targeted loan options include: NCB Business Grow, NCB Merchant Advance, SME Development Access Facility, NCB Receivables Financing and NCB Merchant Advance. These all offer a variety of benefits, tailored to specific needs, business sectors, loan amounts and criteria. 

The Jamaica National Building Society is any entity that offers specialized services to the SME community. The Jamaica National Small Business Loans Limited (JNSBL) started in 2000. Since then it has disbursed 274,393 loans valued at approximately $13 Billion.

The JNSBL also used its partnership with the Development Bank of Jamaica (DBJ) and the National Insurance Fund (NIF) to distribute $5.2 Million and $25.5 Million respectively in loans from funds provided by both institutions to the small business community in the last financial year. Its BizGrow is offered to individuals who have been in business for at least six (6) months, whereby they are able to access a minimum of $60,000 up to a maximum of $400,000.00.

In February 2011, it launched The Tourism Enhancement Fund (TEF) Loan Scheme, specifically designed for individuals, partnerships and companies, (including new businesses) with a minimum of 30% of their businesses committed to providing goods and services to the Tourism Sector. The TEF loan provides access to funding of up to $5 million.

“Now Scotiabank has introduced Small Business Banking with a real difference. We will work with you, providing practical advice and simple solutions so that you can enjoy all the rewards of your enterprise.”

Scotiabank Jamaica created the Scotiabank SME Development Programme to offer goods and services to the SME community. The Scotiabank MSME Alliance Fund, which is part of the Scotiabank SME Development Programme launched in September 2008, is accessible by registered members of the MSME Alliance. The Scotiabank SME Development Programme provides loans at concessionary rates to small and medium sized businesses for the purpose of starting up, as well as, for the improvement of business operations for entities that are already in operation. The Scotiabank MSME Alliance Fund applies only to businesses already in operation.The facility is intended for borrowers who are classified as small or medium sized businesses. To qualify, businesses should not have more than 25 employees and not more than J$135 million in annual revenues. Loan amounts are between $5 million and $500,000.

Some of the general requirements that either one of these banks/institutions may require include: business registration documents, bank statements, cash flow projections, tax compliance certificate, valuation or surveyors report for asset being pledged as collateral, certificates or titles being used as collateral.

With banks continuously seeking new areas of grow and to capitalize on niche markets, the relationships between the banking sector and the small business sector is on that is sure to continue to thrive.