Small & Micro Enterprises

DFC Provides:

• Loans directly to entrepreneurs for starting or expanding their business
• Credit to qualifying organizations (Approved Financial Institutions ) for on-lending for small and micro-enterprise development

DIRECT SMALL/ MICRO BUSINESS LOANS

Purpose:       Loans are considered for start up or expansion of existing operations in the following areas:

• Purchase of machinery and equipment
• Services to the productive sector
• Purchase of vehicles (including boats) as part of a wider productive or service sector initiative
• Retail trading
• Working capital for the above activities

Interest Rate:         As low as 8%

Equity:          Beneficiaries are required to contribute not less than 10% of the total project cost.

Eligibility:    Loans will be made available to eligible individuals with the following characteristics:

• Number of persons employed should not be more than 25
• Floor space should not exceed 4000 square feet
• Total Annual Sales not exceeding $250,000
• Total Assets not exceeding $300,000

Security:       The following types are acceptable:

• Real Estate
• Bill of Sale
• Bill of Sale and Guarantor

CREDIT TO APPROVED FINANCIAL INSTITUTIONS FOR ON-LENDING

The DFC provides credit on a second tier basis to organizations involved in financing micro-enterprise development.  These organizations will include the Credit Unions, Cooperatives and other Productive sector and Non-governmental institutions.  These institutions should have a proven record in the delivery and administration of developmental credit, along with the attributes cited at section 1.1.2 below.

Eligible Institutions

Credit may be made available to eligible Approved Financial Institutions (AFI’s) subject to an Institutional Diagnosis of the institution.  This assessment will include but will not be limited, to an assessment of the following:

• Management capabilities and experience
• Financial performance
• Market penetration strategy
• SWOT analysis

Eligible institutions must demonstrate sustainable performance and bear the following characteristics:

1. Net Income/ Total Assets -Not less than one percent (1%)
2. Operating Ratio -Not more than seventy percent (70%)
3. Loan Principal Arrears-Five percent (5%) or less
4. Non performance (loans)-Fifteen percent (15%) or less
5. Debt Service Coverage Ratio -Not less than 1.25
6. Interest Coverage Ratio - Not less than 1.5
7. Debt to Equity-Not more than 4:1

Interest Rate will be in accordance with Section 9 (9) of the DFC’s Act but will vary depending on the funding sources being used to finance the program.