E-commerce is the new horizon
THE importance of leveraging e-commerce to drive exports, given changing consumer patterns globally, was one of the major talking points underscored at the launch of the EXIM Bank/ JMEA e-commerce Funder last week Friday, September 16, 2022.
Managing director of the National Export-import Bank (EXIM Bank) Lisa Bell said that as consumers demand more doorstep deliveries coming out of the novel coronavirus pandemic, it presents an opportunity for the financial institution and other stakeholders providing support to micro, small, and medium-sized enterprises (MSMES) to help them “pivot to understand these changing trends in consumerism.
“It is true that part of the linchpin of economic growth is export. With investment flows declining and expected to decline over the next two years…export becomes incredibly critical to a country like Jamaica where we rely on foreign exchange,” she said.
She further argued that since Jamaica has competitive advantages in agro-processing, services, and mining, exporting is still an untapped source of income in a country where the MSME sector is a huge driver of employment and economic growth. However, she said that small businesses still need to understand the nuances involved in export and even more so when it comes to e-commerce.
Referring to a woman in Clarendon selling black castor oil as an example, Bell pointed out that such an entrepreneur will need to understand how her website should look, what are the components involved in online transactions, how her label should look, and the types of international certificiation she would need to ascertain to begin promoting her products online and exporting them.
To this end, she applauded the Jamaica Manufacturers and Exporters Association (JMEA) for helping to promote e-commerce among MSMES through its Amazon Launcher initiative. Under the programme, some 20 MSMES have benefited from eight weeks of training and development workshops led by Amazon strategist Onpointe Consultants, which will prepare them for e-commerce.
“E-commerce is the new horizon for economic growth,” Bell emphasised, adding that EXIM Bank stands ready to provide the financing to support MSMES overcome challenges and take advantage of opportunities in this regard.
“The other side of every crisis is an opportunity. There is a glaring opportunity for export
and to allow our MSMES to export more,” she said.
According to the Ministry of Industry, Investment and Commerce, the MSME sector accounts for 80 per cent of jobs in the Jamaican economy and contributes significantly to gross domestic product (GDP), wealth creation, poverty alleviation, female employment, and social stability. As such, permanent secretary in that ministry, Sancia Bennett Templar, pointed out that “any effort to improve the performance and the efficiency of the MSME sector and the productive sector overall, with respect to exports and the growth of the economy, is welome”.
While underscoring her agreement that “e-commerce is the new horizon”, the permanent secretary offered her endorsement of the e-commerce Funder, noting that initiatives of such nature can support the growth of the MSME sector. “We fully support funding for e-commerce. It is clearly part of that broad ecosystem the prime minister speaks about, in terms of making Jamaica a digital economy,” Bennett Templar stated.
“We at the ministry are working on various programmes as well, which will be geared to MSMES and tech and, of course, there’s the DBJ’S [Development Bank of Jamaica] efforts that are already underway in terms of supporting the digitsalisation of the business sector and, in particular, the small business sector,” she continued.
For the e-commerce Funder, the EXIM Bank has earmarked $100 million for MSMES exploring online sales as a means of boosting their revenue. Business are required to be in operation for a mininum two years to qualify for funding, which they will receive for a maximum five years at five per cent interest rate.
Executive director of the JMEA Kamesha Blake, in her address at the signing ceremony, highlighted the timeliness of the new product.
“For many businesses, 2022 is a year for refocus, realignment, and reform as the country recovers from significant economic downturn due to the COVID-19 pandemic. For many local businesses, access to finance continues to be a major challenge to business expansion. However, there is no doubt that EXIM Bank of Jamaica has been a pillar of strength, especially in the harshest times we’ve faced since 2020,” she outlined.
On the other, she said, when MSMES approach commercial banks for loans they usually face challeges, including tight lending standards enforced by high collateral requirements, lack of or poor credit history, and a system that favours larger operations with property as the main collateral. Given these challenges, Blake said that the alternative financing options that the EXIM Bank provides will drive business expansion.