BOJ green lights ISP, McKayla microcredit licences

By: Ramon Henry

The Bank of Jamaica (BOJ) has approved McKayla Financial Services Limited and ISP Finance Services Limited as the latest microcredit firms to be licensed under the new Microcredit Act, 2021 in the $40-billion industry.

Both firms were approved last week, increasing the number of approved entities to 19. Meanwhile, 79 firms continue to operate under regulatory forbearance or non-objection letters pending the processing of their application from the new regulator. This is against the backdrop of the BOJ having received 136 microcredit applications and nearly a year after the July 2022 deadline for firms to apply for their licence to continue operating.

“I am feeling very grateful and we’re happy to have gone through the process of licensing. We have always advocated this is the way to go under a regulatory framework,” co-founder and chief executive officer of ISP Dennis Smith told Jamaica Observer last Friday.

ISP listed on the Junior Market of the Jamaica Stock Exchange (JSE) in March 2016 and reported $1.05 billion in total assets at the end of 2022 with shareholders equity of $520.77 million. The company generated $393.27 million in operating income and $57.64 million in net profit for the period.

McKayla’s approval comes immediately after Supreme Ventures Limited (SVL) spent $68 million last quarter to acquire the remaining 44 per cent in the microcredit firm. SVL also acquired a 15 per cent stake in Dolla Financial Services Limited last Monday.

McKayla generated $82.45 million in revenue last year, but incurred a net loss of $19.19 million. Total assets stood at $285.67 million with $104.01 million in net assets.

These approvals mean that almost every JSE-listed microcredit company, its subsidiary or associate has been approved by the BOJ in the last year. These include Access Financial Services Limited (AFS), Dolla Financial Services, Eppley Consumer Finance Limited, and the two latest firms. Only Lasco Microfinance Limited, a subsidiary of Lasco Financial Services Limited, and NCB Capital Markets Limited associate company Mundo Finance Limited are yet to gain their licences.

Related post