The Development Bank of Jamaica (DBJ): Providing access to financing
The World Bank Access to Finance Project (A2F) is a US$15 million-dollar project that is being executed over a period of 5 years, from January 2018 to January 2023, with the objective of improving access to finance for micro, small and medium enterprises (MSMEs) in Jamaica.
The project is being implemented by the Development Bank of Jamaica under a partnership between the Government of Jamaica and the World Bank.
There are 4 components geared towards the development of financial instruments/products that will support the MSME ecosystem.
Component 1: Enhancing the Credit Enhancement Fund for guarantees to MSME Loans
This component aims at improving the operational features of the CEF.
- capitalisation of the CEF in the amount of US$5 million;
- development of a business plan, financial model, policies and procedures for the operations of the CEF (ongoing as retroactive financing), and training;
- strengthening of DBJ’s capacity to assess and manage risk of AFIs; and
- marketing and awareness raising to Approved Financial Institutions (AFIs) and MSMEs.
Component 2: Supporting the establishment of an SME Fund for risk capital
This component contributes capital to a proposed US$15 million public-private SME Fund of 10 years extendable to 12 or 15 years, which would provide US$100,000 to US$2 million (US$750,000 average amount) in risk capital to established SMEs with high growth potential and with operations in Jamaica, but that have not been deemed investment worthy by private equity funds.
The project supports:
- capitalisation of the SME Fund in the amount of US$5 million;
- management fees for GOJ share in the SME Fund and potential start-up costs of the fund;
- feasibility assessments for the Fund;
- legal, regulatory and taxation reviews to assess gaps in Jamaica’s framework for PEVC funds (onshore or offshore) and proposed reforms to ensure an enabling environment for such funds; and
- technical assistance for the creation and operation of the program, primarily to facilitate pre- and post- technical assistance to SMEs to alleviate targeted constraints
Component 3 Improving the enabling environment for access to finance and business development services for MSMEs (“Enabling Environment”)
This component supports improving an enabling environment for access to finance for MSMEs, through the development of financial instruments, such as leasing and factoring, and business development services for MSMEs to improve their bankability.
It is broken into two aspects: Subcomponent 3A – Enabling environment for access to finance for MSMEs, including the development of financial instruments; and Subcomponent 3B – Business Development services for MSMEs to improve their bankability.
Component 4: Project Management
This component supports a PIU responsible for the coordination, management, implementation, and supervision of the Project.
The project financed:
- the recruitment and training of the Project Implementation Unit (PIU) team members;
- equipment and furniture for the PIU;
- monitoring and evaluation activities; and
- the project’s financial audits.