Small businesses need more to ensure tourism benefits economy

Dr Dana Morris Dixon, economist and executive for business advisory services at The Jamaica National Group, says oppor-tunities for financing in the micro and small business sector must be further expanded if the country is to maintain and improve the benefits of tourism to the local economy.

Morris Dixon was speaking as a member of a panel discussing From Technical Assistance to Financing – The Multiple Dimensions of Multilateral Development Banks, at the recently ended Global Conference on Jobs and Inclusive Growth: Partnerships for Sustainable Development, in Montego Bay, St James.

In 2016, tourism directly contributed 9.3 per cent to the country’s gross domestic product (GDP), or what the country earns from goods and services, the World Travel and Tourism Council documented in its Travel and Tourism: Economic Impact Jamaica 2017 report; and is responsible for 8.4 per cent of employment.


During the signing of a memorandum of understanding between the Tourism Development Corporation and the Travel Foundation, at the conference, Tourism Minister Edmund Bartlett also indicated that micro and small businesses were responsible for driving up to 80 per cent of tourism business.

Giving examples of successful micro and small businesses, which have benefited from the approximately 26,000 loans disbursed by the JN Group subsidiary, JN Small Business Loans (JNSBL), in the past year, Morris Dixon underscored that the risk to financing micro and small businesses was not great, contrary to perception. She indicated that the portfolio at risk for JNSBL was below three per cent.

Therefore, she said, how institutions address risk and collateral is important to dealing with financing for micro and small businesses in the sector.

JNSBL has traditionally accepted appliances and furniture, as well as other non-traditional collateral as security for some of its micro loans, since its establishment in October 2000. And, in 2014, Government introduced the Security Interests in Personal Property Act, which facilitates the acceptance of non-traditional forms of collateral, although the implementation of the act has not yet led to significantly more lending to persons in the micro sector.

“How you deal with risk has to be a critical component of dealing with funding to micro and small businesses,” Morris Dixon emphasised, stressing the need for even more prospects for financing to micro and small business financing in the tourism sector.

… Pursue partnerships to move tourism industry forward

JN Small Business Loans (JNSBL), through its collabora-tion with the Tourism Enhancement Fund (TEF),

on-lends directly to small businesses operating in the local tourism industry, under the TEF 5x5x5 loan product.

Dr Dana Morris Dixon, economist and executive for business advisory services at The Jamaica National Group, indicated that as part of that arrangement, Government takes on some of the risk for lending to these businesses.

“You have to find financing opportunities for the smaller players in the industry if we want to see the trickle-down effect of tourism in this country,” Morris Dixon affirmed.


Echoing a point, which reverberated during the three-day international conference, Morris Dixon also emphasised the need for stronger partnerships to further develop the sector.

“We have to pursue partnerships to move the tourist industry forward,” she said. “The partnership is Government, it’s the private sector, it’s civil society. It’s also the multilaterals too,” she continued, pointing to the need for more technical assistance, to hone the ideas of small and micro operators into working businesses.

She said small operators also need help to build their brand, so that they can be assimilated into the value chain. “And, how we get them into the value-chain system is important,” Morris Dixon said.

She pointed out that, “Our guests stay in the all-inclusive hotels, and there are tours that are sanctioned tours. So smaller players have to do a lot of work in building their brand, and getting [the] established players to see them as a part of the [tourism] product.”

Other members of the panel were St Lucia’s Minister of Tourism Information and Broadcasting Dominic Fedee; James Scriven, CEO, IDB Invest; John Perrottet, senior private sector specialist, trade and competitiveness global practice, The World Bank Group; Justin Ram, director of economics, Caribbean Development Bank and John Keith, managing partner, Caribe Hospitality.

Approximately 1,500 delegates from some 60 countries attended the conference in Montego Bay, St James.

The Global Conference on Jobs and Inclusive Growth: Partnerships for Sustainable Development was hosted by the United Nations World Tourism Organization, Government of Jamaica, World Bank Group, Inter-American Development Bank and the World Travel & Tourism Council, with major sponsorship from Airbnb, AM Resorts, Chukka Cove, The Jamaica National Group and Sandals. The conference ran from November 27-29.

Conference collaborators included the Caribbean Tourism Organisation, Caribbean Hotel and Tourism Association, Chemonics International, and George Washington University. American Airlines and Ethiopian Airlines were the airline partners for the conference.

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