Women Business Owners of Jamaica broker IDB financing deal
Scotiabank in Jamaica creates multi-million dollar loan pool exclusively for women.
KINGSTON, Jamaica, Thursday June 21, 2012 – The Women Business Owners Limited (WBO) has partnered with the Inter-American Development Bank (IDB) and Scotiabank Jamaica to secure a JAM$300 million fund for loans.
According to the Jamaica Gleaner, WBO President Yaneek Page has said the initiative was based on a 2005 study showing that most female operated businesses employ fewer than 15 individuals, were less than four years old, and had difficulty in making the transition from micro to medium-sized operations.
Through this new facility backed by the IDB, members of the WBO can now access individual loans of up to JAM$10 million to fund expansion of their operations through Scotiabank at interest rates of 9.95 per cent for secured credit and 11.95 per cent for unsecured loans, which the bank reportedly said was a significant reduction from its base lending rate of 15.75 per cent.
The facility opened for subscriptions on April 1 and closes a year later on March 31, 2013, and borrowers get seven years to repay loans ranging from JAM$500,000 to JAM$10 million.
The funds, Scotiabank said, can be used for working capital; acquisition of new capital equipment; re-engineering of production processes; retooling of business facilities; modernising technology; replanting and resuscitating crops in the agricultural sector.
Page was further quoted as stating that the 2005 study showed that few businesses could grow from small to medium, and medium to large, or survived past the five-year mark.
"Most are small, micro and had many challenges. Part of the challenge when women start a business is that it's out of necessity, without training, and it is not capitalised properly," she was quoted as saying.
However, Page noted, with training, WBO members would have "a significant platform for growth".
To qualify for the loan, borrowers must be WBO members who have successfully completed and graduated from the WBO technical/business training programme; operated as a business for at least 18 months, and a female must own at least 70 per cent of the company. Projects put forward for funding so far include manufacturing, IT, media, agro-processing, events, roofing, construction, real estate, logistics and financing.
The Gleaner also cited a study by the Mona School of Business released in 2008, which showed that there were 1,718 women-owned businesses in Jamaica, with more than 95 per cent of these being micro-businesses employing fewer than 15 people.