Avia Collinder, Business Writer

COK Credit Union, in partnership with Dr Henley Morgan, pastor, self-des-cribed social entrepreneur, will launch a new business-incubator programme for micro enterprises in Trench Town and other economically depressed communities in which the philanthropist works.

The new small-business loans to be made available are meant to "revive the small-business sector in marginal areas of the economy, including Trench Town and Jones Town", said deputy GM and marketing manager at COK, Michael Steele.

Help is needed

"Help is needed with chicken farming, dressmaking, tailoring, and similar enterprises," Steele said.

Some $9 million is available for the project, on which COK is partnering with Morgan's outfit, known as the Agency for Inner-city Renewal (AIR).

"In addition to AIR, we are open to any other projects which will benefit people in marginal areas of society," Steele said.

The credit union is making available 20 per cent of its portfolio - $1.8 million - to assist persons who have fixed employment.

The MSME programme will also see small farms with unused lands in the inner-city locations converted to agricultural sites.

Loans will range from $50,000-$100,000, with tight project oversight before and after disbursement.

According to Steele: "We will be involved in management, marketing, training of staff and providing assets for coordination. This is really a strategic alliance between COK and Dr Morgan."

The funds to be loaned will be coming from a Jamaica Social Investment Fund (JSIF) credit line with interest rate "in the low 30s".

Processing and commitment fees will be 0.5 per cent each, calculated as a percentage of the loan amount.

To qualify for the loan, individuals must be a member of COK, own and operate a business within the designated area, or live within the area, must be age 18 - 60 years old, and additionally, must be recommended by AIR.

The credit union will open a facility in Morgan's AIR office for loan processing, but applicants will also be able to process requests at the Slipe Road location, where the credit union is headquartered.

COK follows in the footsteps of Churches Credit Union, which in 2007, signed on to community financing with Henley Morgan's AIR, which is now said to be the biggest employer in the community, providing full-time work for over dozens, as well as micro-business advice.

Marketing manager at Churches, Juvene Montague-Anderson, says to date, the company has financed about 70 projects, at least 90 per cent of whose loans were secured with household appliances and what she described as "a minimal amount of cash".

According to Montague-Anderson, the loan-repayment rate has been "consistent, as most projects have been successful".

She indicates that members have returned for additional loans to enhance their businesses.

Montague-Anderson was unable to report the proportion of loan defaults, saying, "Trench Town is not a branch and all businesses would automatically feed into the Eureka branch."

Business growing

The marketing manager also remarked: "Business in the area is growing as many persons have taken loans to open grocery or food outlets. Others have borrowed for taxi purposes, as well as to start businesses outside of the Trench Town area."

The size of the loans issued by Churches varies depending on the purpose of the loan and the member's ability to repay.

Average small-business loans from this credit union range from $70,000-$100,000, with interest rate of four per cent per month for unsecured amounts, and five per cent for secured amounts.

Churches and COK also operate as partners on philanthropic projects. Together, they donated in excess of $300,000 towards a homework programme which facilitated students from Trench Town and other communities.

Dr Morgan, who was said to be off the island, was not reached for comment.

avia.ustanny@gleanerjm.com