BOTH main political parties have made micro to medium-sized businesses (MSMEs) a priority, but their views differ on how the enterprises should be helped.

The Jamaica Labour Party (JLP) wants to expand concessionary lending to the sector, but the People’s National Party (PNP) says it would buy shares in companies.

“Funding will be made available for the GOJ (Government of Jamaica) to take equity positions in firms in the MSME sector, on terms whereby the owners can repurchase the shares over a three to five-year period,” promised the PNP, now in opposition, in its manifesto made public last week.

Its reasoning is that low take-up of available lines of credit by MSMEs is due to those firms having a “limited ability to borrow”.

That’s not to say that the PNP didn’t propose measures to improve access to credit. It wants to pursue a secured transaction act that would enable borrowers to use assets other than land as collateral, which would complement the introduction of credit bureaus, which keep track of borrowers’ behaviour and assesses their risk.

“The intended outcomes are easier access to credit, on better terms, for consumers, and enhanced financial flows, especially into the Micro, Small and Medium Enterprises (MSME) sector,” said the PNP.

In response to a lack of capital and high cost debt, the JLP said in its manifesto that it would establish a Jamaica Venture Capital Programme to “provide the appropriate fiscal and regulatory mechanisms to facilitate the growth of venture capital financing to encourage new start-ups and enable the expansion of existing businesses”.

But its take on financing the MSME sector is largely centred on “providing appropriate incentives and access to special, concessionary financing”. More specifically, it says it plans to capitalise and convert the Jamaica Business Development Corporation (JBDC) as an Approved Financial Institution (AFI). Up to now, only financial institutions operate as AFIs, which borrow low-cost funds from the state and lend at a higher rate.

“The types of small businesses to be served by the expanded JBDC would include those involved in the manufacture of furniture, juice operations, pig rearing, and apiculture among others,” said the JLP.

The governing party also spoke of revitalising the craft industry, starting with a $15 million craft development loan facility available from JBDC and a business training programme.

Estimates of MSMEs’ contribution to employment in Jamaica range from one-third to as high as 80 per cent of the workforce, either way making the sector’s contribution to the economy substantial.

The PNP repeated its promise to immediately lift general consumption tax on electricity — 10 per cent applied to consumption above 200 kilowatt hours (kWh) per month — while both parties say they will provide technical support (mostly in the form of training) to MSMEs.

The JLP also promises to implement an MSME procurement policy that would have state agencies purchase goods and services from MSMEs, once qualified.

The PNP promises to establish a profit holiday for newly registered small firms “to give them an opportunity to stabilise since the first four years of a small firm are the most challenging”.