$30b of dormant funds to be exploited:

THE JAMAICAN Government wants to test the feasibility of financing roughly $6 billion in lending over three years to micro, small and medium enterprises, MSMEs, seeded from dormant bank accounts.

The Planning Institute of Jamaica, PIOJ, will vet the call for proposals for consultants to test the feasibility of devising such a fund on behalf of the Ministry of Industry, Commerce, Agriculture & Fisheries, or MICAF.

The call for proposals closes on May 22.

The industry ministry wants the consultant to assess “the extent to which unclaimed funds resident in financial institutions can be utilised as a critical financing option” for MSMEs, according to its invitation for expressions of interest. The review is meant to determine the relevance, effectiveness, efficiency, and sustainability of the proposed financing option, the document added.

Research conducted by the ministry indicates that it will require an amount of $6 billion in funding over a period of three years to support programmes and projects involving business development and advisory services, loan products and related services, and micro equity/micro venture funding for the sector.

The source of this level of funding was recognised to be a major challenge, particularly in light of the current fiscal constraints facing the Government of Jamaica, requiring the ministry to consider creative means of financing – which is where the consideration for tapping dormant funds came in.

Unclaimed funds held by financial institutions remain with the institutions for 15 years. At that point, public notices are run over the course of a year, giving the owners of the funds a last chance to claim the funds.

Unclaimed balances are ceded to the Consolidated Fund thereafter.

At last estimate for year 2014, around $30 billion of unclaimed funds resided within financial institutions. However, MICAF notes that the figure is subject to validation as some of the pool may have been subject to double counting.