... DBJ looks to more efficient, effective programme management
FOR MILVERTON Reynolds, managing director of the Development Bank of Jamaica, a US$4-million per annum tranche presents an excellent opportunity to ramp up the Bank’s existing loan programme for the SME sector on a grand scale. The timing could not have been better, he said.
“There is a technical assistance that will allow us to put in place an electronic platform where we will be able to issue and process guarantees electronically, rather than doing it manually as we now do,” Reynolds said.
“This will enable us to monitor and manage the programme far more efficiently and more effectively. We are also going to be looking at enhancing the current project to move it from 50 per cent to 90 per cent of guarantees,” he added.
Julie Katzman, executive vice-president of the InterAmerican Development Bank, who signed on behalf of the multi-lateral agency, applauded the initiative, pointing out that finding the right balance in the trade-off between the amount of guarantee one provides and the kind of risks the financial institutions are willing to take could be the deciding factor that spurs greater business activity.
“You have to manage that
carefully and I think that the intent is to find the space between 50 and 90 per cent guarantee so that the banks have enough skin in the game,” she said.
“But instead of being afraid to take risks if you provide a bit more guarantee, they take a bit more risk – (and) they lend to a few more companies, you begin to see a greater impact,” said Katzman.
“So the idea is to have the kind of flexibility to let Development Bank of Jamaica manage the programme within those parameters to try and optimise both sides of that equation, at the same time reaching more companies but also making sure that the banks perceive that they themselves are taking risks and that they are developing relationships with those companies,” she added.