THE NEW "e-economy" firms and dotcom companies looking for start-up funds in Jamaica continue to find it difficult to raise funding from local commercial banks.One local company that has managed to get off the ground and shows signs of prospering in cyberspace is VentureTech.
The company was started earlier this year and has established a real estate market Web site called JaRealty.com which already has made a notable impression as a business-to-business service Web site.
VentureTech's chief executive officer Jason Robinson speaking on the site's prospects, said: "We thought the site could generate about $21 million(US$500,000) in sales for our members in the first six months.
"Within three weeks after launch we are almost half way there so we are hoping to reach our goal. I am not aware of many other local sites generating this sort of revenue for its members."
Deborah Cummings's Century 21 team has claimed the first sale from the site for a property listed at US$225,000 (J$9,450,000).
Agent Nicola Melhado listed the property on the site and within two weeks of doing so her client saw the property online, e-mailed her, flew down from the United States and made the offer.
For the week after its launch JaRealty.com averaged 10,600 hits per/day. The site has over 250 commercial and residential properties on-line and an auction data base.
Despite such stories, the leading commercial banks have been reluctant to make loans to fledgling companies entering this potentially lucrative industry.
Citibank boss Peter Moses said: "The success of e-commerce and Internet companies in the U.S. is familiar to us all. But commercial banks in Jamaica would be hard-pressed to make loans to budding entrepreneurs who have no track record and have no tangible collateral. At Citibank we have not had that many applications for funding for this kind of venture.
"That's not to say we would not consider such applications. Not so long ago our financial sector was in dire straits and many bankers may appear a little reticent about backing new ventures in what is considered a new industry. Many of these young people should perhaps try the development banks such as the National Investment Bank of Jamaica (NIBJ)."
Public relations officer at the NIBJ, Claudette White said: "We will fund internet businesses provided they meet our criteria. In fact we have already funded an Internet company and would expect to consider many more applications."
Mr. Robinson said Jamaica is not yet ready to embrace and fully understand the business requirements for e-commerce.
He has been talking with the banks concerning financing since last November and is still awaiting a suitable response. He pointed out that many of the banks were looking for substantial security to cover loans and were particularly worried about on-line fraud.
Merchant accounts
"At the moment they are trying to figure out ways to set up merchant accounts to where the transactions are levied. The only way to do good e-commerce business is to go through the U.S. Local businesses cannot pay each other on-line using local credit cards and that is a huge problem here," added Mr. Robinson.
Managing director of Amaze Internet Ltd., Monique van Geijn, who has recently completed a Web site for Dehring Bunting & Golding, and is presently working on a Web site for one of Jamaica's leading fashion photographers, Brian Rosen, also sees the obstacles facing the dotcom companies in Jamaica.
She made it clear that practically all businesses in Jamaica will have to go on-line and that commercial banks will have to acknowledge the global market place and its commercial potential.
"In Jamaica, the banks have been slow to support e-commerce ventures but one only has to see just how many hits the Gleaner on-line site gets to have an idea of the potential.
"The Ministry of Commerce & Technology, what an appropriate name! It has for the longest while talked about getting Internet businesses off the ground, yet nothing seems to be happening. I can see many companies including my own specialising in Web site marketing, whereby companies try to increase the number of hits for companies that go on-line but the banks have to be willing to back us or be responsible for the technological revolution passing us by," said Miss van Geijn.
