Ashford W. Meikle, Business Reporter

Gary Peart, chief executive officer of Mayberry.

Chief executive officer of Mayberry Investments Limited (MIL), Gary Peart, says that the minority 49 per cent stake which it recently took in the micro enterprise financing company, Access Financial Services Limited, will not dilute the brand of the brokerage firm.

But it is contemplating listing the company in about five years.

Peart told the Financial Gleaner on Thursday that MIL's stake in Access was purely an investment based on MIL's broader initiative of diversify its equities portfolio and revenue stream.

Investment

"It's an investment. It's not that we are buying the company - view it from the perspective that we are buying shares from the market," said the CEO. "But our intention is that within five years the company will grow to a point where we can list it," said Peart.

Prior to the investment, all of Mayberry's equities were in quoted stocks.

Peart said his company had no plans to get involved in the management of the company, nor merge operations.

"We don't have any operational responsibilities and we don't have any plans to distribute Mayberry's products through [Access'] branches," insisted Peart, adding, "The Mayberry brand caters to a particular market which Access does not."

A day earlier, on Wednesday, Mayberry advised the Jamaica Stock Exchange that it had paid $38 million for the 49 per cent stake in Access, a fledgling company founded six years ago by Marcus James, the son of former Corporate Group chairman and KLAS managing director, Neville James.

Small business loans

The company specialises in loans from $5,000 to $200,000 to small and micro businesses and individuals, and has a loan portfolio of just over $100 million for some 4,000 clients.

With its headquarters on Half-Way Tree Road in Kingston, Access employs some 40 persons in six branches in Montego Bay, Ocho Rios, Mandeville, Spanish Town, Portmore and Morant Bay.

"We believe that our relationship with Mayberry will strengthen our financial product development and service delivery capabilities, making it possible for us to develop and sustain even stronger relationships with our target market," noted James in a press release issued by Mayberry.

But, although Mayberry will not be intimately involved in the day-to-day operations of Access, both Peart and MIL's chairman, Christopher Berry, will sit on its board.

The Mayberry CEO, in a statement issued to the press, argued that the company's "participation in Access Financial Services is in keeping with our commitment to provide financing opportunities for small businesses in Jamaica."

In the press release, Peart noted that an important component of Mayberry's business development and investment strategy was to invest in businesses that have strong growth prospects, criteria which, apparently, Access satisfied.

"We are impressed that he took six years to reach $100 million in loans. At that rate, it could potentially take him another four to five years to reach $200 million," the CEO pointed out to the Financial Gleaner.

"But, when we make the investment and offer assistance in terms of providing some amount of funding, expertise, corporate governance principles and practices, [James] could potentially get up to $200 million in loans within two years. If the company achieves that, the original shareholder benefits and we benefit. So it accelerates the process."

Mayberry, said Peart, is on the prowl for similar business deals, having been approached in the past.

"This is the first of such transactions. From we made our intention clear last year, we have received a number of different proposals, so now we are going to look to diversify into some of these private instruments because we find that the returns on some of these private companies at times exceed the returns for companies listed on the exchange," said Peart.

ashford.meikle@gleanerjm.com