Conforming with best practices in governance and compliance
Durrant Pate/ Contributor
Dolla Financial Services has now got formal approval from the Bank of Jamaica (BOJ) to operate as a micro lender in Jamaica’s micro credit space.
Eyebrows have been raised about the fact that Dolla, being a publicly traded company, had not been in receipt of a licence to operate in the micro finance space. To add insult to injury, there was bickering in some quarters about Dolla not having a licence to operate though it had declared its desire to buy out competitor, Access Financial Services, which is among the first micro lender to get approval in the newly regulated micro lending market in Jamaica.
The new regime now sees the micro financing space being governed by the Bank of Jamaica (BOJ).
Proud to get licence
Speaking with Our Today, Dolla Chairman Ryan Reid advised: “We are very delighted to have now received our approval from the Bank of Jamaica to operate under the new regulations which now govern the microfinance sector. As an entity listed on the Jamaica Stock Exchange, we structured our company to conform with best practices in relation to governance and compliance, which has become more germane, given the introduction of the new Microcredit Act.”
Reid added: “The significant duties and responsibilities assumed by us under this approval will never be lost on us as a company. The board of directors understands this and our CEO, Kadeen Mairs, has a full appreciation of this.”
Dolla’s announcement of the BOJ ‘s approval of its application for a licence comes just over a week after the banking authorities issued a stern warning that small and micro lending enterprises advertising their services without a licence should to get their affairs in order or risk being penalised under the law.
As the economy contracts due to higher inflation and rising interest rates, many Jamaicans are turning to small lenders for financing, despite the onerous rates they charge. Many of the traditional banks are becoming even more conservative after being hit by fair value losses and even more delinquencies on their loan books, creating opportunities for new players who charge exorbitant rates.
Speaking at his recent quarterly media briefing, BOJ Governor Richard Byles indicated at the time that only five entities had been granted licences.
According to Byles, ”we have been awarding approval licences to some of these micro-lending companies and there are a lot of them – 118, I understand. The aim is to have about 50 per cent of the assets of that industry approved by December, which will be a mix of the small and large players. That will cover half of the industry by way of asset value.”
The Government approved the Microcredit Act in July of last year and gave a 12-month period of transition for existing operators to apply to the BOJ for a licence.
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