KINGSTON, May 26 (JIS):
The Micro Investment Development Agency (MIDA) has disbursed $3.31 billion and facilitated the development of over 35,000 businesses since its inception in 1991.
Chief Executive Officer of MIDA, Lanville Henry, told JIS News that the entity has contributed to the creation of close to 63,000 jobs.
During 2015/16, the entity disbursed $155 million, financed over 1,600 businesses, and generated more than 2,400 jobs.
MIDA was established primarily to promote, encourage and facilitate the development of the Micro, Small and Medium-sized Enterprise (MSMEs) sector in Jamaica, as part of the Government’s strategy to create wealth and generate employment.
Through a revolving pool of resources generated primarily from the Government of Jamaica/Government of Netherland Legacy Fund, it provides financing to assist new and existing MSMEs in agriculture, manufacturing and services, among other sectors.
The funds are made available through microfinance organisations (MFOs) for on-lending to the businesses.
MIDA wholesale funds to nine MFOs including the Self Start Fund, Jamaica Business Development Corporation (JBDC), Jamaica National (JN), Small Business Loan Limited, Access Financial Services Limited, and First Union Financial Company Limited.
“So, MIDA has no direct credit relationship with microenterprises to which its funding is extended…the MFOs get the applications from the MSEs, do the assessment and then decide who to lend,” Mr. Henry explained.
The MFOs advise MIDA of the various businesses that they lend to, the amount and the purpose of the loan.
“We decide how much to lend the MFOs based on their financial positions including the strength of their balance sheet and cash flow projections. We are not going to lend to an organisation that is going to lend money, forget about it and don’t collect it,” he pointed out.
Over the 25 years, MIDA has ensured the sustainability of its revolving fund through the collection of approximately $2.8 billion.
The CEO told JIS News that the agreement between MIDA and the MFOs stipulates that repayments must be made on a quarterly basis. He said the organisations have been very cooperative with a 90 per cent compliance rate.
The CEO told JIS News that MIDA has $150 million to lend for the 2016/17 financial year and appealed for partnership from local and/or international financial donors.
“We are hoping that with the emphasis on the development and strengthening of the MSME sector that funds will be identified as they (MSMEs) are the backbone for job creation and employment,” Mr. Henry said.