Scotiabank Jamaica on Thursday launched its Small and Medium Enterprise (SME) Development Programme, a $400-million fund to finance small businesses.

William Clarke, Scotiabank president and chief executive officer, said that this initiative was in keeping with the bank's strategy to command a bigger market share in this sector.

Dr Rosalea Hamilton, Scotiabank chair in entrepreneurship and development, said that it was time to get the small business "investment ready".

member associations

Hamilton, who is also the president of the MSME Alliance, which currently has 22 member associations, said that this initiative would help the sector to grow, build capacity and to compete.

"We cannot resolve the problems overnight," she said, "but we can help these entities to succeed."

Clarke said the objective was to reach the grass roots.

"We hope the taxi operators and fishermen can benefit from this programme," said Clarke.

He also said the bank was upbeat about the development of small businesses, but at the same time, cautioned owners to maintain proper accounting records. "There is a culture of tax evasion and tax avoidance that is the genesis of enterprises being unwilling to maintain proper accounting records," Clarke remarked.

right step

Aldain Reid, president of the Young Entrepreneurs' Association, said the Scotiabank programme was a step in the right direction.

"The fact that a mainstream financial institution has earmarked funds for the SME sector is a landmark in itself," Reid said.

Clarke, though, said that many financial institutions had resisted the funding of start-ups as the risks were too high. He said the bank would tread cautiously and monitor the growth of the programme, while giving the assurance that the programme would go on after he left the bank.

"It is in the interest of the bank and the need of the times," he said.

Clarke ends a 40-year career at Scotiabank at the end of October.

The SME Development programme will be accessible through Scotiabank's branch network. The fund will provide $100 million for start-up businesses, $100 million for the MSME Alliance Fund, and $200 million for new and existing enterprises.

amitabh.sharma@gleanerjm.com