Thirteen microcredit institutions licensed

Thirteen microcredit institutions that provide financing to individuals and micro, small and medium-size enterprises (MSMEs) have been licensed since the implementation of the Microcredit Act, 2021.

“We have over 100 microcredit institutions that have applied to be licensed, and that’s a process that will take some time,” said Minister of Finance and the Public Service Nigel Clarke.

He was speaking at the media launch of BlueStart Capital (Jamaica) Limited trading as Courts Ready Cash on May 4.

BlueStart Capital, a member of the Unicomer Group, has been approved by the Bank of Jamaica to operate in the country’s microfinance space, pursuant to the Microcredit Act.

The legislation seeks to, among other things, license microfinance institutions and bring them under the regulatory supervision of the BOJ; protect consumers by discouraging microcredit institutions from lending money at excessive interest rates; outlaw predatory lending practices, threats and intimidation; promote greater transparency through the disclosure of lending rates and other term-loan products; as well as reduce the risk of the industry being used to facilitate money laundering.

It also allows a regulator (BOJ) to monitor the sector and ensure good business practices.

Clarke said that businesses that violate the provisions of the Act will be subject to serious sanctions.

“The government, through the regulator, will be ensuring that those who violate the provisions of the Microcredit Act by engaging in money-lending activities … without being duly licensed, would be subject potentially to serious sanctions,” he noted.

REPORT ABUSE

He further urged the public, if they are aware of any abuse of the consumer practices by microcredit organisations, to bring it to the attention of the regulator.

“Loans have to be repaid, but there are methods that are not approved for enforcement of repayment, and if persons … are being overly harassed and abused as far as collection activities are concerned, they just need to raise the alarm and the regulators will come in,” Clarke said.

Minister of State in the Ministry of Industry, Investment and Commerce Norman Dunn noted that the Consumer Affairs Commission (CAC) has responsibility for developing the code of conduct for companies licensed under the act and investigating complaints made by consumers about microfinancing entities.

“I, therefore, commend the CAC for their diligence in developing the Code and I look forward to getting an update from them after they have received the feedback on their draft submission,” he said.

Dunn said the code of conduct is important, as it will hold entities accountable and allow consumers that added measure of safety in conducting their business.

Opposition Spokesperson on Finance Julian Robinson lauded BlueStart Capital for complying with the requirements under the act.

“We know the people who come to microcredit agencies tend to be the most vulnerable and they are prone to being exploited … so it is important that you are providing a service and you are doing so within the confines of the act,” he said.

General manager of Bluestart Capital, Atasha Bernard, said the company will continue to strengthen its compliance framework and governance structure to remain compliant with all the required regulations.

JIS