Keenan Clarke, (left) final year student at the Edna Manley College of the Visual and Performing Arts explains how he incorporated Jamaica proverbs into his jewellery to Gillian Hyde (right) General Manager, JN Small Business Loans and Miriam Smith, Director, School of the Visual Arts. The occasion was the launch of the School of the Visual Arts Final Year Exhibition held at Edna Manley College in 2016. Clarke was the only jewellery student in his class.
Obtaining funding for entrepreneurs in the creative industry can be challenging.
Just ask St. Andrew-based natural jewellery maker Imogene Reid, who discovered this when she approached several institutions for loan funding a few years ago. The owner of Natural Jewellery by Cherry has been making craft items since she was nine years old.
“Most of the financial institutions said I had no collateral and others said that what I did as a business didn’t qualify me for a loan,” she explained. “In one instance I got assistance but I was treated so badly that I didn’t go back.”
The entrepreneur learned that the output of her non-traditional creative business, did not receive the same recognition as businesses with tangible assets such as equipment and land to serve as collateral for loans.
“I found that most of them don’t see what you do as important although I have done exhibitions outside of Jamaica in countries such as Mexico, and Suriname and they appreciate our work,” she said. ‘Here in Jamaica, it is another matter.”
That was until she approached JN Small Business Loans (JNSBL).
Gillian Hyde, general manager, JNSBL, said her company is actively looking at ways to accept even more non-traditional forms of collateral, such as intellectual property, future crops and receivables, to better assist clients.
“We have always used items such as: household furniture, appliances, tools and machinery and other non-traditional forms of collateral,” explained Mrs. Hyde.
“However, we are now exploring other forms of collateral, such as intellectual property, crops and other receivables, which would give more entrepreneurs, particularly persons in the agricultural and creative sectors, greater access to credit,” she outlined, explaining that such categories might only be acceptable in certain circumstances.
The Jamaica Intellectual Properties Office (JIPO) has been in discussion with the government and financial institutions as part of plans to include intellectual property as collateral for persons seeking funding. The office noted in 2016 that most banking institutions required land titles to register a mortgage, in order to grant a loan. However, as financial institutions engage more with the creative Micro Small and Medium Enterprise (MSME) sector, the use of intellectual property should become a part of the collateral pool.
Mrs Hyde notes that the National Security Interests in Personal Property (NSIPP) Registry allows for the registration of movable assets, including some non-traditional property and, is administered by the Companies Office of Jamaica.
“The Security Interests in Personal Property (SIPP) Act makes mention of these non-traditional forms of collateral. And, therefore, more financial institutions should examine them, to determine how more entrepreneurs with such property can be assisted,” she added.
She also noted that, “Many persons due to the direction of technology, are investing in new forms of property; hence the need to also examine how these can be used as collateral.”
The JNSBL general manager noted that already, through the Development Bank of Jamaica’s (DBJ), Credit Enhancement Facility Partial Guarantee Programme, more MSMEs stand to benefit from funding.
“We have used the DBJ’s Partial Guarantee Programme to assist members of the agricultural sector. What this programme does is to provide a guarantee of up to 80 percent for persons who have challenges with providing collateral. And, we believe even more persons can benefit from this facility,” she explained.
“Credit is available,” she added. “However, more persons need to educate themselves about how they can obtain these funds based on collaterals they own; and lending institutions should also play our part in making the process smoother.”
Mrs. Hyde adds that a good relationship is also important in assisting clients with non-traditional forms of collateral.
“We have found that most are serious about their businesses and honour their commitments. In talking to Miss Reid we were able to assist her by accepting a non-traditional form of collateral and she is doing well,” she said.
Miss Reid has since been able to expand her jewellery-making operations.
“I have a good relationship with JNSBL and they have assisted me with growing my operations since I approached them a few years ago,” she stated.