The International Finance Corporation (IFC), a member of the World Bank Group, has created another avenue for small and medium-sized enterprises (SMEs) in Jamaca affected by the COVID-19 pandemic to access to financing.
In collaboration with its local partner Sagicor Bank Jamaica, the IFC yesterday launched the Working Capital Solutions programme as part of its global response to support the recovery of the private sector from the pandemic.
“This partnership with IFC will better enable us to support the recovery and growth of such businesses after what has been a challenging year for most”— Chorvelle Johnson Cunningham, CEO, Sagicor Bank
To this end, the IFC has allocated funding of up to US$40 million, through Sagicor Bank,with the aim of expanding financing for SMEs in Jamaica. With this assistance, SMEs can enhance their resilience, continue day-to-day operations, and protect jobs.
CEO of Sagicor Bank Chorvelle Johnson Cunningham, in a release, underscored that the “SME sector plays an important role” in the Jamaican economy by creating thousands of jobs for its citizens.
“This partnership with IFC will better enable us to support the recovery and growth of such businesses after what has been a challenging year for most,” she continued.
The investment from IFC complements a previous advisory project that helped Sagicor Bank grow its SME business and support Jamaica in strengthening its credit framework through a regional Secured Transactions Collateral Registry.
Prior to the pandemic, Jamaica needed an estimated US$2.7 billion to meet SME financing needs, since only 27 per cent of that sector could access loans or lines of credit.
In fact, a World Bank Financial Sector Assessment concluded that, even prior to the crisis, many Jamaican small business owners were using their personal funds for investments, which resulted in a delay in business development and growth. The pandemic has also disrupted important segments of the economy such as tourism and manufacturing.
“IFC is very happy to be working with Sagicor Bank to increase lending to small and medium-sized companies. The SME sector is extremely important to the Jamaican economy and our partnership with Sagicor Bank will not only provide much-needed support to the sector but also to the country’s recovery.,” said Judith Green, IFC manager for the Caribbean.
IFC’s strategy in Jamaica is focused on supporting economic growth, inclusion and sustainability which includes improving the investment climate, supporting public-private partnerships to help address critical infrastructure needs, and expanding access to finance to SMEs and women by working with financial institutions.