MEDA | MF Mini Enterprise Services Profile

Mini Enterprise Services in Jamaica

Shortly after starting in Haiti, a modest replication of the Small Business Development Program (SBDP) was begun in Jamaica, a nearby country not as brutally impoverished as Haiti. Jamaica had a more sophisticated network of services targeted for small businesses, but its existing institutions did not always deliver the services needed by the poorest sectors. Jamaica would help MEDA fine-tune the SBDP methodology (and ultimately find it unsuitable there) and define its limitations.

The Jamaica version was called Mini Enterprise Services (MES). It operated two offices in Kingston. Due to a variety of setbacks, including the devastation of Hurricane Gilbert in 1988 which wiped out much of the program's loan portfolio, Mini Enterprise Services never gained the foothold the SBDP did elsewhere. When it shut down, the remaining capital was placed in a Jamaica trust fund to finance similar or related ventures.

For a number of years MEDA had no active work in Jamaica. In 2003 MEDA's microfinance department began working with the giant Scotiabank to develop a micro-lending program for small enterpreneurs in the poorest areas of Kingston.

Thriving Jamaica mini-bank inherited MEDA's vision

MEFL vendor

The spirit of what was known as Mini-Enterprise Services has been revived in a new agency called Micro Enterprise Financing Ltd. (MEFL). Begun in 2002, MEFL offers tiny loans to people who cannot access conventional credit. It is entirely independent but its supporters include MEDA, Scotiabank (also known as the Bank of Nova Scotia) and the Canadian International Development Agency (CIDA).

MEDA was hired to provide technical assistance and resources in areas such as start-up processes, microfinance best practices and operational systems and policies.

MEFL has shown such good results that banking officials see it as a possible template for other countries. The Toronto Star, Canada’s largest newspaper, recently described MEFL as the Bank of Nova Scotia’s “quiet little experiment.” The experiment is producing happy results. MEFL, which offers loans of $50 to $2,500, has 1,375 active loans totalling $365,000, with a repayment rate of 97 percent.

Why has MEFL managed to do well despite the difficult climate of urban violence and the frequent devastation of hurricanes? “One of the reasons is because I run it like a bank,” says Debra Williams, executive director of MEFL. “I am a banker, I use banking principles, and I’m as tight as I was at the bank.”

MEFL also offers clients a unique package of financial services and training. “We offer mentoring, training, monitoring, lending and savings facilitation through Scotiabank. We try to link our clients to what exists in the market because we can’t do everything ourselves. We are like a conduit.”

Typical of a business that operates on “upside-down” principles, Williams is happy when she can “lose” customers who build up enough savings and assets to move into the regular banking sector.

“We don’t consider it losing, we consider it graduating,” she says. In the case of MEFL, clients graduate to Scotiabank, which has more than a hundred years of history in Jamaica. (Excerpted from MEDA News, Fall 2005)