edison galbraith general manager loan origination...

www.dbankjm.com

Edison Galbraith General Manager

Loan Origination & Portfolio Management

“CREATIVE APPROACHES TO MSME FINANCING” Presented at the JMMB-PSOJ Economic Forum

July 3, 2014

www.dbankjm.com

CREATIVE APPROACHES TO MSME FINANCING A discussion of the objectives, challenges and opportunities for expanding the financing of micro, small and medium-sized enterprises - from the perspective of the Development Bank of Jamaica.

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DBJ MSME Loans J$'000M

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Overall DBJ Loans J$'000M

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Jamaica, the place of choice to live, work raise

families and do business

Internationally competitive businesses

www.dbankjm.com

DBJ’s role

is to

facilitate

DBJ’s MISSION:

to facilitate and promote

economic growth, national development and an enabling economic

environment

by providing businesses and government with

appropriate Financing, Privatization & PPP and Technical Support solutions

DBJ’s core functions www.dbankjm.com

Capacity Development

Loan Origination &

Portfolio Management Privatization

& Public Private Partnerships

ENTERPRISE RISK MANAGEMENT, RESEARCH & STRATEGIC PLANNING

economic growth &

development

CariBBB (Regional FX) CariBBB+ (Regional J$)

jmAA- (National)

financial sustainability

new investment & new jobs

DBJ Alignment to GOJ’s Growth Strategy

5

Enhance Business Environment

MSME capacity building & TA

Micro Finance Industry Development

Enhance Access to Financing

Concessionary & flexible loan financing

Credit Guarantees

Venture Captial

Mobile Money

Private Sector Project Financing PPP Modality

Strategic Investments &

Energy

Privatization

Energy Programmes

Facilitate ICT Industry

Facilitate RDIT*

DBJ’s role in MSME financing www.dbankjm.com

KEY FINDINGS OF 2009 STUDIES ON MSME ACCESS TO FINANCING

• Intermediaries Low Appetite and Capacity to assess and

monitor MSME loans

• MSME Readiness (Limited Business Planning, Management, Record Keeping and Customer Service)

• MSME Risk-Return (Limited Collateral, Business failure, Relatively High Transaction and Administration Costs)

• Business Competitiveness - Including High Cost of Energy


DBJ promotes and finances MSME investment…

DBJ’s experience

• Available pool of funds

• Low cost financing • Inability to access

funding

• Market conditions • Capacity Building • Public Education • Credit and

Legislative Enhancements

RESULTS + =

DBJ facilitates

Public Education, Training and Workshops

Involving

Banks

Financiers

Businesses

Entrepreneurs

Business Service Providers DBJ also serves on various GOJ Committees

www.dbankjm.com Promoting MSME investment

http://www.dbankjm.com/dbjgreenbiz/

www.dbankjm.com

Jamaica Business Development Corporation (JBDC) Training and Technical assistance for producers – Craft (30) , Spa and Wellness Products (10); 3 Energy Auditors to support micro and small

businesses

Institute of Law and Economics – MSME Alliance

Business Entrepreneurial Empowerment Programme (BEEP) training for over 500 MSMEs

JAMPRO

Export MAX I – Preparing 15 SMEs for export (including HACCP and FDA audits)

Export MAX II – Preparing 20 SMEs for export

Promoting MSME Investment…

www.dbankjm.com

Mobile Money for Microfinance (M3) Pilot project to reduce the cost of transactions for Microenterprises

Jamaica Manufacturers Association - CariCRIS

Improving Access to Finance for Micro, Small and Medium Enterprises Operating Manufacturing Businesses in Jamaica

Institute of Law & Economics - Scotiabank

BEEP - Scotiabank Enterprise-wide Risk Management and Finance Business Risk Rating and Credit Assessment

Jamaica Venture Capital Programme

Development of an Ecosystem for the provision of Equity-Venture Capital financing for SMEs in Jamaica

Promoting MSME Investment…

www.dbankjm.com

DBJ TECHNICAL ASSISTANCE VOUCHER Objectives: 1. Increase SMEs access to credit 2. Increase SMEs access to business development services

(BDS) 3. Develop BDS providers market

New Product…

Business Development Services to be offered

1. Preparation of Business Plans

2. Business Training – (i) Financial Management

3. Business Training – (ii) Understanding Bank requirements to access financing

4. Business Training - (iii)Defining Business

Model and business and preparing proposals for Bank financing

5. Preparation of Financial Statements 6. Book Keeping and Accounting Principles 7. Business Improvement



DBJ’s experience



funding



RESULTS + =

DBJ provides loan financing…

www.dbankjm.com

in Jamaican dollars at 9.5% to 10.0%

and at 7.25% United States dollars

for up to 7 years

Agriculture

Agro-processing

Manufacturing

Mining and Quarrying

Technology

Tourism

Services

Energy (All Sectors)

for 90% of the Project Cost for Micro and Small

Enterprises and 70% for Large Enterprises

primarily through a network of Approved Financial

Institutions (AFIs)

to viable projects in…

Interest rates are subject to change

DBJ provides loan financing…

www.dbankjm.com

through co-financing and direct lending to large

projects in strategic sectors such as

Renewable Energy and ICT/BPO

DBJ also promotes the development of the Micro-finance Industry by accrediting and lending through Micro-finance Institutions (MFIs)

DBJ accredits and provides loan financing through…

www.dbankjm.com

COMMERCIAL AND MERCHANT

BANKS

OTHER APPROVED FINANCIAL

INSTITUTIONS & AGENT

MICRO FINANCE INSTITUTIONS

• Bank of Nova Scotia (BNS)

• National Commercial Bank

(NCB)

•

Capital & Credit Merchant

Bank (CCMB)

• Citibank N/A

• Jamaica Co-operative Credit

Union League (JCCUL) – All

Credit Unions

• National People’s Co-operative

Bank (NPCB)

• National Export Import Bank

(EXIM)

• Access Financial Services

• Jamaica National Small

Business Loans

• Nation Growth Microfinance

Limited

• MicroCredit Limited

• First Caribbean International

Bank (FCIB)

• Jamaica Money Market Brokers

(JMMB)

• First Heritage Co-operative

Credit Union

• First Global Bank (FGB)

• RBC Royal Bank (RBTT)

• Mayberry Investments Limited • St. Elizabeth Co-operative

Credit Union

• St. Thomas Co-operative

Credit Union

• Sagicor Bank (PCB)

• AGENT: Jamaica Business

Development Corporation

(JBDC)

• McKayla Financial Services

Limited

• First Union Financial Services

Limited

www.dbankjm.com

DBJ loan financing results…

DBJ’s lending has increased… from 4,430 loans valued J$2.7B in FYE March 2011 to 9,799 loans valued J$6.7B in FYE March 2014

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Credit Enhancement Facility Guarantee …

www.dbankjm.com

Partial Credit Guarantee facility for SME loans

Maximum guarantee per project J$10M 50% coverage for general SME loans 80% coverage for SME Energy loans

To date DBJ has issued J$263M in CEF guarantees allowing 140 borrowers to access J$540M in loans.

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(J$M)

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Number of CEF Loans

www.dbankjm.com

Energy financing results…

• In FYE March 2014 DBJ approved J$658M for 102 projects

• Since 2009 DBJ has approved Energy loans totaling J$1.6 Billion to over 196 projects

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Number of Loans Approved

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Energy Loans Approved (J$M)

www.dbankjm.com Energy financing results…

DBJ has approved over J$1.6 Billion in Energy

loans to over 196 projects

Sectors include manufacturing,

agriculture, agro-processing,

restaurant/food service, tourist attraction, small

hotel, retail store, contact centre, offices as well as

energy equipment suppliers and ESCOs

All incorporated energy efficiency solutions with

the renewable energy technologies implemented ranging from solar and PV systems to bio-digesters

and wind turbines.



DBJ’s experience



funding



RESULTS + =

www.dbankjm.com DBJ financing…

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Thank you.

www.dbankjm.com

Edison Galbraith General Manager

Loan Origination & Portfolio Management Development Bank of Jamaica Limited

11A – 15 Oxford Road Kingston 5, Jamaica

edison galbraith general manager loan origination...

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