DBJ intensifies effort to help MSMEs go digital

Aiming to widen the number of micro and small businesses that go digital, the Development Bank of Jamaica, DBJ, has designed a new grant and loan programme that helps entrepreneurs transform their operations.

The development bank has set up a ‘go-digital’ grant under the Voucher for Technical Assistance Programme; and a separate go-digital funding programme, which, in addition to a grant for $300,000, offers MSMEs a loan of $800,000.

The loan is for a maximum term of three years, and is repayable at 2.0 per cent interest per annum.

DBJ has also joined hands with the Jamaica Technology and Digital Alliance, JTDA, formerly the Jamaica Computer Society, to assist with supplier arrangements for its digital transformation programme.

JTDA is developing the www.godigitaljm.com website which will showcase all the local providers of digital technology goods and services. The website, which is currently in its testing phase, will allow business persons to easily identify digital needs, choose their preferred suppliers, and get advice and training on how to navigate the digital world.

“The intention of this platform is really not only to advance our MSMEs, but to also enable our tech sector vendors and digital service providers in their ability to attract and retain customers locally and, hopefully, we will be able to widen that to the Caribbean region,” JTDA President Stacey Hines said in a joint press release.

Over the past year, DBJ has sharpened its focus on providing entrepreneurs with assistance to build out their digital capabilities as the COVID-19 pandemic reshapes the way businesses operate.

A few of the technological needs highlighted throughout the pandemic includes website development, e-commerce, digital payment solutions, office infrastructure support, digital transformation training, videoconferencing tools, and business applications such as accounting and payroll systems.

JTDA is just one private partnerships the government funding agency has secured for its digital transformation programme, but DBJ says other private partnerships are in train for 2022. The nature of the potential partnerships were not disclosed.

DBJ, through its go-digital grant and loan offerings, allows for the funding of business software development for accounting, payroll, human resource, customer relationship management, among others; website and e-commerce development, social media marketing; digital transformation plans; and the purchase of computer hardware and software.

Approved entrepreneurs will have 100 per cent of a service valued up to $300,000 paid from the grants and another $800,000 in loan to fund other digital activities of the company. The offer is only available up to March 2022.

Additionally, DBJ has removed upfront payments on vouchers for business plans and financial statements. Previously, entrepreneurs were required to pay 30 per cent of $250,000 upfront, or $75,000.

“The DBJ is committed to the growth and development of all Jamaicans. And so, cognisant of the disastrous effect that the coronavirus pandemic has had on every aspect of our lives, this suite of products and services is our direct response to ease the burden on the business community and to assist in their recovery,” DBJ Managing Director Milverton Reynolds said in an emailed response to the Financial Gleaner.

The loan resources are available for micro, small and medium-sized enterprises with annual sales not exceeding $425 million on a ‘first-come, first-served’ basis. However, grants are only available for micro and small businesses with annual sales not exceeding $75 million.

The application will be assessed by DBJ’s project manager.

The development bank utilises over 20 technology firms and business development organisations, referred to as BDOs, to deliver the Go-Digital Voucher Programme services to MSMEs. Since this financial year, 258 go-digital grants have been issued, and 36 have been redeemed at a value of $6.7 million.

The Young Entrepreneurs Association of Jamaica, YEA, is just one of the BDOs the DBJ has approved to deliver its vouchers. YEA President Cordell Williams-Graham commends DBJ for its work on the Voucher for Technical Assistance Programme – under which over 4,500 vouchers have been issued since its launch in 2014, with approximately 1,500 redeemed at a value of $315 million – but recommends that the pace at which the vouchers are disbursed be reviewed by the DBJ, and that entrepreneurs undergo needs assessment before applying for a loan or grant.

“What we often find is that the entrepreneurs will come in and say they want a grant to develop their website, when at the stage of their business they should really be looking to do a business plan, for example. That needs to be addressed, and this is where the DBJ can partner with the BDOs,” Williams-Graham said.

So far, under the wider technical voucher programme, the grants have mostly been utilised for business and strategic plans, coaching and mentoring, the DBJ said.

“It must be noted that the go-digital vouchers are quickly becoming the most popular vouchers under the programme. Eight hundred and forty-nine start-ups have benefited from the voucher programme, with the most dominant sectors being services, 45 per cent, and manufacturing, 10 per cent,” the bank added.

DBJ’s go-digital loan, accessible through its list of approved financial institutions and select microfinance institutions, is available to help with digital transformation.

The new go-digital funding programme falls under the DBJ’s Social and Economic Recovery and Vaccine programme, known as SERVE. The SERVE programme has a pool of $3 billion, of which $100 million has been allocated towards the go-digital vouchers. The government agency has earmarked $1 billion for loans, while around $2 billion will finance MSMEs’ COVID recovery efforts.

karena.bennett@gleanerjm.com