Small and medium companies starved of bank credit should give serious consideration to the junior stock market to raise capital, says GraceKennedy executive Don Wehby, who argues that a strong SME sector could fuel Jamaica's economic growth.

"It is not high science," said Wehby, speaking as presenter at a Kingston workshop on the junior stock market organised by DunnCox, NCB Capital Markets and Ernst and Young.

"If you are going to get Jamaica growing, this is the sector to focus on. The Junior Stock Exchange (JSE) and SMEs can be the game-changer going forward."

Wehby, GraceKennedy's chief operating officer who just months ago wrapped up a two-year stint with government in the finance ministry, says SMEs comprised 90 per cent of all forms of business in Jamaica, provided 60 per cent of employment and accounted for 40 per cent to 60 per cent of output.

" A lot of companies with the right idea and a great business model have been destroyed by high interest rates," he said. "SMEs need to find the right mix between equity and loan capital."

The JSE's junior market has been in operation since April, but only has one listing, media company Anbell, a fairly active stock. The junior exchange was created with Wehby's input while he was at the ministry.

The markets are generally in a downturn, but Wehby said this was a good time to get in so that companies could ride the recovery.

"This could be one of the main means of getting your equity/loan capital balance corrected. The junior exchange is ideal for that," he said.

avia.collinder@gleanerjm.com

SOURCE: Financial Gleaner, Friday, November 27, 2009