The new prospects for growth in the economy have bolstered interest in the micro, small and medium-size enterprise (MSME) sector, which is estimated to account for up to 80 per cent of GDP.

Policymakers have long recognised the significance of the sector and the need to create an enabling environment in which these businesses can thrive.

Such an environment must facilitate access to affordable financing which meets the specific needs of the sector, adequate support services

for business development, facilitation of the export potential that may exist, and financial inclusion for different subgroups which have, up until now, been disenfranchised.

Financial inclusion refers to access to affordable financial services such as credit, insurance and saving, particularly for disadvantaged and low-income segments of society.

A Jamaica Information Service report of an address by Colin Bullock, then chairman of the Financial Services Commission, noted that more than 30 per cent of Jamaicans are ‘unbanked’, that is, they do not have a bank account. Mr Bullock called for greater financial inclusion for all citizens as a key ingredient in fostering growth and national development.

Speaking at a Caribbean Group of Securities Regulations conference in April 2016, Mr Bullock pointed to an unacceptably high ratio of adults in Jamaica without bank accounts and, by extension, access to financial institutions. This, he said, is an inhibiting factor to economic development and must be immediately addressed.

“Financial inclusion leads, almost inevitably, to poverty alleviation and is a major factor positively influencing the growth of micro, small and medium-size enterprises and the creation of jobs, especially new jobs,” Mr Bullock argued.

“With participation in financial services, both the poor as well as those engaged in MSMEs become more equipped to operate their businesses, acquire assets and manage risks. This is not a matter of something that is useful; this is an area critical to national development,” he added.

Mr Bullock said governments and regulators can bolster financial inclusion by increasing financial education initiatives.

“We concluded the FSC’s 2015 financial education in schools programme here in Jamaica and it is clear that financial education is a crying need and a development imperative,” Mr Bullock noted.

His words were reinforced by the governor of the Bank of Jamaica, Brian Wynter, who, in a June 2016 address to the Caribbean Financial Action Task Force, disclosed that Jamaica has embarked on an initiative to develop a national strategy on financial inclusion. This strategy is aimed at increasing the uptake and use of financial products and services by underserved individuals, farms and micro, small and medium-size firms.

“Apart from the obvious justification on grounds of equity and social cohesion, the initiative is motivated by a recognition that growth that is sustainable must be growth that is inclusive. Relevant also is the fact that financial exclusion is a money-laundering and terrorism-financing risk. A number of initiatives to facilitate financial inclusion in Jamaica are already under way, but a key challenge will be how to strike the correct balance between universal access to the financial system and safeguarding it from abuse through money laundering and the financing of terrorism,” Mr Wynter said.

It is the position of the Jamaica Association for Micro-Financing that Government support for the push for financial inclusion could be displayed in a number of ways.

These include moving forward with the microcredit legislation; the provision of low-interest, accessible wholesale funds; the implementation of risk-sharing mechanisms for wholesale funds; a review of the current and recommended tax regime to ensure that it is not punitive to microenterprise operators; the collection, collation and dissemination of much-needed data; as well as the promotion of financial literacy and best practices.

• Blossom O’Meally-Nelson is chairman of the Jamaica Association for Micro-Financing.


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