Breaking Barriers in Business Financing: A Jamaican and Caribbean Perspective

Access to financing continues to be one of the most persistent and formidable challenges for businesses, especially in emerging markets like Jamaica and across the wider Caribbean. For small and medium-sized enterprises (SMEs), securing funding often involves navigating a landscape filled with high interest rates, strict collateral demands, and lengthy bureaucratic procedures. However, as the region undergoes fiscal transformation and embraces digital innovation, there are signs that a more inclusive and dynamic financing environment is beginning to take shape.

To understand today’s financing challenges and opportunities, it's essential to revisit the historical

context that has shaped Jamaica’s financial system. The 1990s banking crisis stands as a turning point, culminating in the creation of the Financial Sector Adjustment Company (FINSAC) in 1997.

At the time, over 150 financial institutions—including banks, insurers, and securities dealers—were severely affected, leading to massive government intervention. While FINSAC succeeded in stabilizing the system by acquiring ownership in struggling institutions, the long-term effects were profound. Public debt ballooned, unemployment surged, and trust in financial institutions eroded. Many banks adopted conservative lending practices in the aftermath, and this legacy of risk aversion continues to impact credit accessibility for entrepreneurs—especially those lacking collateral or a strong credit history.

Despite this turbulent past, Jamaica has made significant strides in restoring macroeconomic stability. The 2025/26 national budget, presented by Finance Minister Fayval Williams, reflected meaningful progress: a J$1.260 trillion expenditure plan focused on growth, no new taxes for the tenth consecutive time, and a projected debt-to-GDP ratio of 68.7%, a sharp decline from over 130% in the 1990s. Interest costs as a share of tax revenues have also decreased, signaling more efficient debt management. These indicators point to stronger fiscal governance, institutional reform, and improved monetary credibility. However, even with these advances, the challenge of making financing more accessible and affordable for businesses remains.

Traditional business financing in Jamaica and the Caribbean continues to present a series of obstacles. Chief among them are stringent credit requirements—many lenders demand real estate as collateral, audited financial statements, and strong credit histories. This excludes a large portion of SMEs, particularly startups and family-run or informal businesses. High interest rates are another major barrier, with SME loans often hovering around 18–20% annually, while microloans can surpass 50% due to perceived risk. In addition, the loan approval process is frequently slow and cumbersome, involving multiple review stages and extensive documentation—hardly ideal for businesses facing time-sensitive opportunities. Compounding these issues is a lack of awareness around alternative financing options, which prevents many entrepreneurs from exploring more flexible and innovative sources of capital.

Despite the limitations of traditional banking, a wave of emerging solutions is reshaping the financing landscape. Fintech and digital lending platforms are offering faster, more accessible credit through alternative credit scoring, seamless application processes, and integration with accounting tools that provide real-time business data. In Jamaica, platforms like Lynk are driving the adoption of mobile payments and digital finance, supported by regulatory sandboxes designed to encourage safe financial innovation.

Crowdfunding and peer-to-peer (P2P) lending are also gaining momentum. Entrepreneurs are turning to platforms like GoFundMe and Kickstarter, along with regional counterparts, to raise capital. P2P lending allows direct engagement between investors and businesses, often resulting in lower borrowing costs and increased community support. This model is especially attractive for startups and creative ventures.

The growth of venture capital and private equity in the Caribbean is another promising development. In 2021, Latin America and the Caribbean attracted US$18.5 billion in venture funding—an astonishing 288% increase over the previous year. Locally, organizations such as FirstAngels Jamaica have helped connect entrepreneurs with angel investors, and the Junior Stock Exchange has enabled companies like Dolla Financial Services and One on One Educational Services to raise substantial capital. These developments suggest that investor confidence is rising, and that the regional funding ecosystem is gradually maturing.

Government-led initiatives are also playing a critical role. The Development Bank of Jamaica (DBJ) and EXIM Bank have introduced several SME-focused programs, including the Partial Credit Guarantee Scheme, venture capital matching funds, and concessionary loan facilities for key sectors. The TOOL programme, which provides equipment loans to tradespeople at capped interest rates, is another notable innovation. These interventions help reduce the risk for commercial banks, thereby encouraging more lending to SMEs in agriculture, manufacturing, and export industries.

One particularly flexible financing model gaining attention is revenue-based financing (RBF), where businesses repay a fixed percentage of monthly revenues instead of a set loan amount. RBF is performance-driven and non-dilutive, making it attractive for growing companies that may not yet qualify for traditional loans. Variations such as milestone-based loans and private placement notes (PPNs) are also emerging as viable funding strategies.

Several real-world examples illustrate how businesses are succeeding outside of traditional financing models. Infinity Systems, a Jamaican water-tech startup, was rejected by conventional lenders but found success through angel investment facilitated by the RevUP Jamaica accelerator and FirstAngels Jamaica. This funding allowed them to scale operations and win major contracts. On the public equity side, companies such as Dolla Financial and One on One have tapped the Junior Market to raise billions of Jamaican dollars. In the fintech space, startups like Paywise (Trinidad) and CaribPay (Barbados) have secured investment through innovation competitions and venture capital, underscoring the growing appeal of tech-based business models.

While policy shifts and technological advancements play a major role in transforming access to finance, businesses themselves must also act proactively. Improving financial literacy is a key step—entrepreneurs should be equipped to interpret financial statements, manage cash flow, and stay informed about evolving funding trends. Building strong credit profiles by maintaining good payment histories, registering with credit bureaus, and leveraging moveable assets as collateral can also improve borrowing prospects.

Diversifying funding sources is another essential strategy. This includes blending equity, debt, grants, and supplier credit, while also considering diaspora investors, crowdfunding platforms, and P2P networks. Strengthening business plans, clearly outlining growth strategies, and tailoring proposals to specific funders can greatly enhance funding success. Finally, leveraging technology—using accounting software, performance dashboards, and KPI tracking tools—can improve transparency and readiness for investor engagement.

In conclusion, breaking barriers in business financing requires more than isolated initiatives; it demands systemic change. Jamaica’s journey, shaped in part by the lessons of the FINSAC crisis, underscores the importance of building resilient and accessible financial systems. Today, thanks to improved macroeconomic fundamentals, regulatory reforms, and digital transformation, the country is better positioned to support entrepreneurs and SMEs.

The 2025 budget reflects this shift—pointing to a more disciplined, forward-thinking economy. The task now is to align financial services with the evolving needs of the modern business environment. Entrepreneurs who build credibility, embrace new financing models, and integrate digital tools into their operations will be best positioned to grow, innovate, and lead the next chapter of economic transformation across Jamaica and the Caribbean.