Jamaican investors celebrated a recent Bloomberg report showing that the Jamaica Stock Exchange (JSE) has the highest growth rate in the world for 2015. Such numbers reveal a thriving Jamaican business sector and a viable emerging economy. But, though improving accessibility to the market for foreign investors did much to boast growth, the JSE still saw low engagement from the Diaspora – nowhere near what our community’s share of the market could be.
Many in our community have not taken advantage of investing in Jamaica through the JSE. The lack of participation also hints at a broader problem – the low number of savings and investment portfolios in our community
Granted, it’s difficult for the majority of the Diaspora to invest or save when, according to a 2014 survey, disposable income averages less than 5 percent. This hardly leaves sufficient excess funds to save or invest. However, the same survey shows a large percentage of the community spending heavily on unnecessary consumption goods, made evident by high credit card balances, which severely minimize the ability to save.
Some people may argue that interest rates offered by banks and other financial institutions in South Florida are so low, that it does not encourage savings or investment. However, the Diaspora risks weakening its empowerment if it’s not accumulating significant investment capital, particularly capital that can contribute to the expansion and viability of its business sector.
It’s disappointing that after some 45 years of our community’s steady growth to over 350,000 residents, the community does not own a major financial institution. Thanks to tight regulations set by the Florida Office of Financial Regulation, there are major challenge in establishing a community bank owned and operated by the Jamaican Diaspora. Fewer community banks have opened in South Florida since 2010 – but the window has not been closed to future enterprises.
Despite signs that a significant percent of the community overextends themselves in the consumption of material goods, the Diaspora is far from being financially depressed. It shouldn’t be difficult to source investment capital for either a community bank or a credit union owned by the collective South Florida Diaspora.
Even without a steady investment source, several small businesses have developed in South Florida’s Jamaican community. Entrepreneurship is definitely not lacking. Their expansion, however, may be limited due to the lack of reliable investment sources. Although the region’s economy has seen significant improvement since the 2008 market crash, commercial and community banks still maintain tight restrictions on business loans. Enterprising individuals have initiated limited loan portfolios to help small business, but this source of funding is more the exception than the rule.
Jamaica’s Diaspora in South Florida is desperately in need of such initiatives. We need to find alternatives to the scarce capital available outside the community.
This proposed financial institution won’t materialize overnight. It will take time to ensure the institution meet state requirements, and is organized to minimize potential risks. But it would be encouraging to at least see deliberate planning begin to create such an institution. The failure of so many promising businesses in the community because of insufficient capital is frustrating and wasteful.
A viable Jamaican-owned financial institution within the Diaspora could grab the attention of Jamaican investors. Some of the excess capital generated by investors on the JSE, should it continue its buoyancy, could be redirected to the business community in the Diaspora.
The success of the JSE, its investors and listed businesses, is yet another example of the resilience of Jamaicans. This resilience needs to be displayed in the budding business community among the Jamaica’s Diaspora.