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ceo’s think tank by Tracey-Ann Wisdom

Home Access Not a True Measure of Local Internet Use


he 2010 Internet Telecommunications Union (ITU) Internet Usage and Telecommunications Report shows that Jamaica’s current internet penetration rate is 55%. Separate research carried out by the Mona School of Business (MSB) shows that 24% of local households have access to a computer and 15.6% have internet access at home. Our CEO, Tyrone Wilson, commends the MSB on this valuable research, which provides us with information on internet activity in Jamaican homes. However, he believes we should focus on the number of people who are actually accessing the internet as opposed to home usage. “Currently, the internet is accessed at other locations besides the home, such as at schools, internet cafés, workplaces, wi-fi hotspots and other public locations,” Wilson points out. “People who want to use the internet know where to go to get access even if they don’t have it at home.”

that never had this privilege before,” he added. Here are some of Wilson’s recommendations to increase Internet access for average Jamaicans: Lower the cost for Internet service Set up more wi-fi hotspots in public locations Establish more Internet cafes, especially in inner city communities For the latter, existing community centres can be used instead of building new facilities, Wilson states.

Tyrone Wilson CEO of eZines Limited

CEO’s Think Tank is a weekly discussion between Your Money reporters and our CEO, Tyrone Wilson. It will focus on pertinent business issues that are discussed on a regular basis among corporate executives, entrepreneurs, small business owners, political leaders and other key leaders in our society.

While this is so, Wilson, as the founder and CEO of an online media company, knows the importance of regular internet access. As such, he wants to see more being done to improve Jamaica’s internet penetration rate. “Presently, a lack of competition in the market and high cost are the major impediments to home access for many Jamaicans,” he says, calling on both the government and private Internet service providers to work together to create a more competitive environment that would encourage more people to purchase internet service for their homes. “I would also like to highlight that Digicel is doing tremendously well in providing internet access to areas of this country yourmoney ezine

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Marcus james


on Micro financing for small business development

sk any entrepreneur what is the number one challenge in getting his business from idea to implementation and the response will most likely be accessing start-up capital. Banks are generally reluctant to finance new businesses because they are ‘risky’ – statistics show that most of them fail within three years. The criteria for a bank loan are usually restrictive to the average would-be entrepreneur, especially if his venture is not in a ‘traditional’ industry. It was this gap in the finance market that prompted Marcus James to go into the business of funding new enterprises, starting his own company, Access Financial Services (AFS) in 2000. “I found out that a company called Development Options had established a line of credit for people who wanted to get into lending microloans, so I applied and was successful in getting the line and that is how Access was born,” he said. “We recognized that there was a whole subset of the business community that couldn’t get access to financing because the banks deemed them as being too risky and microfinance has really come in to fill that void.” The local microlending industry has blossomed over the years as other agencies have gone into operation and traditional banks have developed their own microloan facilities. For micro and small enterprise (MSE) operators and those who want to start their own companies in this sector, agencies like AFS are a lifeline. “We offer a certain amount of flexibility that is not typically offered by traditional financial institutions. What we place emphasis on is really trying to get an understanding of the client, of their integrity, of their business and use

Marcus James (Founder and Managing Director of Access Financial Services) talks about being an entrepreneur.

“We recognized that there was a whole subset of the business community that couldn’t get access to financing because the banks deemed them as being too risky and microfinance has really come in to fill that void.” that as the primary driver of the loan decision as opposed to looking at security, which is usually the hurdle that’s difficult to overcome,” James explained. “We’ve had customers that have started with us at a very small level and have expanded their businesses into reasonably large establishments and you can see the growth in the clients and their businesses and their whole lifestyle over time.” AFS provides two types of loans: MicroBIZ, which lends between $5000 and $350,000 and MegaBIZ, which lends between J$350,000 and J$3 million. “Our portfolio is really a mirror of what you see in the wider economy. Our customers primarily come from the trading sector, but we lend to people involved in the service, manufacturing and agriculture sector as well,” James stated.

As one of Jamaica’s premier microfinance companies, AFS has recorded steady growth since its inception, attracting a J$38-million investment from Mayberry Investments Limited in 2006 and becoming the first company to list on the Jamaica Stock Exchange Junior Market in 2009, with its J$100 million IPO being fully subscribed within two days. ASF has expanded to 13 retail loan outlets and four money services branches island-wide, serving approximately 10,000 customers with personal, auto and business loans and also offers cambio services. About 3,000 members of the customer base are business clients. Last year, the company recorded net profits of J$147.2 million. Its current loan portfolio is J$547 million. Despite the strides made and the visible growth within the sector, James argues that there is still room for further development: “There’s still a void in people getting money to start a business. A lot of facilities exist if you’re in business already, but there is no real venture capital available.” advertisment

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insights by Tracey-Ann Wisdom

Jamaica Must Improve ICT Rating


to be More Competitive

plethora of new technological applications are created almost daily, many of them completely revolutionizing the way we live and offering infinite scope for economic benefit. This is the age of the information super-highway and many countries are cruising in the fast lane, driving fiscal development and improving the lives of their citizens. However, as with many international phenomena, Jamaica again finds itself behind the curve, recording yet another low ranking on an international development index. The 2010-2011 Global Information Technology Report, published on April 12 by the World Economic Forum (WEO), has ranked Jamaica 73rd out of 138 countries based on its poor networked readiness index (NRI). In fact, it is among the 10 countries that have recorded the worst decline over the last five years, falling seven places since last year and 28 places since 2007. The NRI measures the degree to which countries use information and communication technologies (ICT) to enhance global competitiveness. It ranks countries based on three components: the environment and infrastructure for ICT within the country, the readiness of the key stakeholders (individuals, businesses and governments) to use ICT and the actual usage of ICT amongst these stakeholders. According to a recent survey on access to and use of ICT conducted by the Mona School of Business (MSB) at the University of the West Indies (UWI), Mona, only 24% of the population has

is therefore imperative that our nation’s children are exposed to ICT as much as possible. There have been some great strides in incorporating technology in education, such as the e-Learning Jamaica project and entrepreneurial ventures like Go-GSAT. However, many schools still don’t have the necessary resources to develop their own programmes for students.

Additionally, technology drives innovation, so new products and services would be developed as people discover and create new technologies. access to a computer at home and only 38% use the internet at least once per day. These figures are unacceptable in today’s highly-networked world where ICT is perhaps the industry with the greatest potential for creating employment and entrepreneurial opportunities for the population. Greater ICT saturation island-wide will enable development in more areas of the country as more people will be able to work where they are and not have to relocate to the metropolitan areas to seek employment. Additionally, technology drives innovation, so new products and services would be developed as people discover and create new technologies. It could also revolutionize traditional industries, making the work more timely and costefficient.

There seems to be several developments underfoot as local telecommunications companies have taken steps to introduce new technologies to the market, including 3G, 4G (wimax) and fibreoptic internet service, for both business and personal use. Hopefully, the competition generated among these companies will make internet service more affordable to more Jamaicans so we can move up the rankings on the NRI and be more competitive globally. advertisment

It is important to note that most of the technological innovations we see around the world have come from young people, many of whom developed their ideas while in school, like Mark Zuckerberg of Facebook fame. It yourmoney ezine

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Small Business Banking

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How to Keep Accurate Financial Records


ecord keeping simply means maintaining accurate accounts of all your company’s transactions. There are several benefits to keeping up-to-date financial records, including: having a clear picture of how well your business is doing; greater control over spending, which can help you lower operational costs; improving your chances of securing loans as you will be better able to outline your company’s performance to lending institutions and, of course, greater ease when filing taxes. It might seem like a daunting task, especially for first-time entrepreneurs and those who don’t have a background in finance or accounting, but you don’t have to hire a full-time accountant, an additional cost you might not be able to afford initially. Whether you are just

Devise a system that works for you, such as updating this month’s records and working your way backwards monthly or starting from the earliest month for which no records were kept and working chronologically. starting out or have been in business for a while, here are a few tips that can help get your finances in order: • Expenses: Record all receipts, invoices and bills so you know how much money is being spent and where. According to microfinance organization Accion USA, it is also advised that you open a chequing account for your business, which will track expenses incurred monthly as well as the exact dates of these transactions. • Income: Similarly, note all incoming finances such as payments for goods or services, or the sale of an asset. Record the type of payments (cash or cheque) and the dates received and the source of payments.

• Paper or Software: It is not imperative to keep your records on the computer. You can still use the tried-andtrue ledgers, journals or other accounting stationery. However, if you find using the computer more convenient, you might consider software like Quicken by Intuit or Microsoft Money for single-entry accounting, or Quickbooks from Intuit or Peachtree Accounting from Sage Software for double-entry accounting. • Catching up: It is not too late to start keeping track of your finances, but it will take some time to set things in order. Accion recommends breaking the task down monthly so you don’t get overwhelmed. Devise a system that works for you, such as updating this month’s records and working your way backwards monthly or starting from the earliest month for which no records were kept and working chronologically. • Get help: If you find it all too much to handle, seek assistance from a professional. You can hire a part-time or freelance accountant for a few hours per week or month, as the need arises.

• Inventory: This gives you an accurate picture of what you have in stock versus what you need to purchase and also helps you determine how sales are going. Keep records of the purchase date of the items in stock, purchase price, sale price and sale dates. • Payroll: If you have employees, keep track of all personal information, hours worked and wages paid out. yourmoney ezine

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Your Money eZine  

April 20, 2011