The Multilateral Investment Fund (MIF), in partnership with Scotiabank, has approved a project under its Line of Activity for Promoting Small Enterprise Financing that will increase access to finance for 300 small businesses in Jamaica, with special emphasis on women-led enterprises. This will be the MIF’s first project under the new women entrepreneurshipBanking (weB) initiative, and is the first weB project in the Caribbean.
About 40% of small businesses in Jamaica identify access to finance as a major constraint to the development of their businesses. Through an earlier project with the organization Women Business Owners Jamaica, the MIF is aware that female entrepreneurs’ access to finance is especially constrained. To address these issues, the MIF is working with Scotiabank Jamaica to enhance the bank’s business and risk rating system and to adjust its small enterprise loan appraisal process to better serve the credit needs of both male and female business owners. Through the project, Scotiabank Jamaica’s staff will be trained in the enhanced loan appraisal process.
Additionally, the project will provide capacity building and mentoring services to selected businesses in order to prepare them to receive business and credit risk ratings, which will further facilitate their access to loans provided by Scotiabank Jamaica. The project will ensure that at least 30% of the businesses selected to participate in this training will be owned by women.
The total project cost will be US$970,000, of which the MIF will contribute up to US$550,000.
Given Scotiabank’s significant presence in the Caribbean, the bank may upgrade its small business loan appraisal process across the region, using lessons learned from this project. Additionally, this project may provide an innovative model that other banks, both in the region and beyond, may use in downscaling their operations to better serve small enterprises.
About women entrepreneurshipBanking (weB)
Launched in April 2012 during the Summit of the Americas in Cartagena, Colombia, weB is a joint effort between the IDB’s Structured and Corporate Finance Department’s (SCF) beyondBanking Program and the Multilateral Investment Fund’s (MIF) Line of Activity for Promoting Small Enterprise Financing. The initiative provides two kinds of incentives: technical assistance grants for training programs and knowledge transfer; and financial products, such as risk-sharing facilities and partial-credit guarantees, to banks and other financial intermediaries to support them in developing and testing innovative, inclusive lending models that target women-owned small and medium enterprises.