Jamaican bankers often complain that poor record keeping and information gaps in the operation of small - and medium-sized enpterprises - SMEs - tend to hamper the ability of finance houses to lend to such businesses, even when low-interst money is set aside for them.

Patsy Latchman Atterbury, vice-president for small-business banking at Scotia Jamaica, knows the issue well, having presided over a $400 million loan facility for SMEs that her bank created in September 2008.

Many applicants, she compplains, were unable to provide information required to take up the money, although the fund was "oversubscribed".

"We had $300 million, for which we received 91 applicants," Latchman Atterbury said. "In the initial stages information was a problem. They did not come with information."

Much of what was absent, would in the normal course of things for a business, be considered basc information, like, what was their gross profit and which products delivered the best returns.

loan history

"They had to go back and dig through their history," Latchman Atterbury explained. "Twenty per cent of applicants were unable to provide the information required. Fifty have received loans, with 17 still being processed."

The upshot was that many firms missed out or were delayed in receiving loans with some of the best rates in the market.

For instance, $100 million was set aside for start-up businesses (ScotiaRunning Start) at a rate of 9.875 per cent, with another $100 million for the MSME Alliance (ScotiaMSME Alliance Fund) at a rate of 8.625-10.875 per cent. Then there was another $200 million for new and existing enterprises (ScotiaBusiness Builder) at a rate of 8.625-12.125 per cent. Businesses could borrow up to $5 million.

Latchman Atterbury's essential message to SMEs at a mid-September workshop put on by her bank for operators of small- and medium-sized business was that they had to be prepared when they planned to approach financial institutions and had to be prepared to run their businesses like, well, businesses. If they didn't, they were likely to be starved of capital from the formal financial market.

"Access to financing has continuously been touted as the reason why many small businesses fail, (but) when one drills down deeper, you find that access to funding is predicated by two critical issues affecting business management," Attubury Latchman explained.

"The first is availability of key information on the business, inclu-ding sales, cost of sales and expen-ses. Sadly, this is lacking in many business proposals.

"The other is quality of the manager and or owner as demonstrated by the passion that his/her displays and his/her clear and thorough understanding of the business, which again is very limited in many small-business entrepreneurs."

The workshop, attended by more than 49 entrepreneurs, focused on improving decision-making and record-keeping, and the use of technology.

performance to be examined

The Scotiabank executive said the performance of current loans would be examined before a further injection for the small business sector was made.

"Once these loans perform well was we will be in a better position to see if more is to be injected. We have to pay special attention to this group to ensure that these loans don't go bad," she said.