Dolla Fin­an­cial Ser­vices lim­ited has become the latest com­pany to be approved by the Bank of Jamaica (BOJ) as a licensed micro­cre­dit insti­tu­tion pur­su­ant to the 2021 Micro­cre­dit Act.

Dolla is one of the six com­pan­ies to have received a licence from the BOJ, which reg­u­lates the microfin­ance sec­tor. The other firms include Access Fin­an­cial Ser­vices Lim­ited, Kris An Charles Invest­ments Com­pany Lim­ited, King­ston Fin­ance Lim­ited, Nykhana Invest­ment Com­pany Lim­ited, and Trublu Fin­an­cial Ser­vices Lim­ited.

Dolla is one of the six com­pan­ies to have received a licence from the BOJ, which reg­u­lates the microfin­ance sec­tor. The other firms include Access Fin­an­cial Ser­vices Lim­ited, Kris An Charles Invest­ments Com­pany Lim­ited, King­ston Fin­ance Lim­ited, Nykhana Invest­ment Com­pany Lim­ited, and Trublu Fin­an­cial Ser­vices Lim­ited.

The BOJ received 112 applic­a­tions from exist­ing micro­cre­dit com­pan­ies, of which 97 applic­a­tions were sub­mit­ted in July, with 71 received July 29-30. BOJ Gov­ernor Richard Byles recently stated that the BOJ intends to have at least half of the industry licensed by the end of the year and so is pro­cessing one licence at a time.

Before the Micro­cre­dit Act, the sec­tor was not form­ally reg­u­lated, which meant no entity had to report to the BOJ. Firms licensed under the Act are approved to provide fin­an­cing to indi­vidu­als as well as micro, small and medium-sized enter­prises (SMES). However, every entity or firm in the micro­cre­dit space provid­ing credit to indi­vidu­als had to apply at the end of July for a licence with the BOJ or cease oper­a­tions.

Before the Micro­cre­dit Act, the sec­tor was not form­ally reg­u­lated, which meant no entity had to report to the BOJ. Firms licensed under the Act are approved to provide fin­an­cing to indi­vidu­als as well as micro, small and medium-sized enter­prises (SMES). However, every entity or firm in the micro­cre­dit space provid­ing credit to indi­vidu­als had to apply at the end of July for a licence with the BOJ or cease oper­a­tions.

“We applied in Janu­ary, and it basic­ally took us about 11 months. The due dili­gence pro­cess was very rig­or­ous and we’re just happy to be out of the gate… there are a lot of require­ments that we have to uphold to main­tain our licence and we’ve been given those instruc­tions by the BOJ. We are look­ing to abide by those require­ments and we’re just happy on behalf of the share­hold­ers and, as a lis­ted com­pany, to have our licence to give the mar­ket the con­fid­ence they needed,” said Dolla Chief Exec­ut­ive Officer Kadeen Mairs in an inter­view with the Jamaica Observer at the com­pany’s Jamaica Stock Exchange (JSE) Private Mar­ket list­ing cere­mony on Tues­day.

“We applied in Janu­ary, and it basic­ally took us about 11 months. The due dili­gence pro­cess was very rig­or­ous and we’re just happy to be out of the gate… there are a lot of require­ments that we have to uphold to main­tain our licence and we’ve been given those instruc­tions by the BOJ. We are look­ing to abide by those require­ments and we’re just happy on behalf of the share­hold­ers and, as a lis­ted com­pany, to have our licence to give the mar­ket the con­fid­ence they needed,” said Dolla Chief Exec­ut­ive Officer Kadeen Mairs in an inter­view with the Jamaica Observer at the com­pany’s Jamaica Stock Exchange (JSE) Private Mar­ket list­ing cere­mony on Tues­day.

Dolla lis­ted the two tranches of its vari­able-rate secured bond which was upsized to $1.17 bil­lion and closed on Octo­ber

18. Tranche I is for three years with an interest rate floor of 10.50 per cent with tranche II being for five years with an interest rate floor of 11.75 per cent. The bond is secured by Firstrock Global Hold­ings Lim­ited — trad­ing as Firstrock Private Equity Lim­ited (FRPE) — and Dequity Cap­ital Man­age­ment Lim­ited who are guar­ant­ors. Both tranches will pay interest on a quarterly basis.

18. Tranche I is for three years with an interest rate floor of 10.50 per cent with tranche II being for five years with an interest rate floor of 11.75 per cent. The bond is secured by Firstrock Global Hold­ings Lim­ited — trad­ing as Firstrock Private Equity Lim­ited (FRPE) — and Dequity Cap­ital Man­age­ment Lim­ited who are guar­ant­ors. Both tranches will pay interest on a quarterly basis.

This is the second Private Mar­ket list­ing in 2022 by a Junior Mar­ket com­pany after Future Energy Source Com­pany Lim­ited lis­ted its $1-bil­lion bond on April 12.

With this cap­ital injec­tion, Dolla’s asset base increases from the $1.36 bil­lion it had at the end of Septem­ber to around $2.53 bil­lion, a sig­ni­fic­ant jump from $334.02 mil­lion at the end of 2020. The com­pany’s loan book has grown from $294.26 mil­lion in 2020 to $1.17 bil­lion at the end of Septem­ber.

“Dolla was formed not only to provide fin­an­cial sup­port to entre­pren­eurs — MSMES — but also to be an inspir­a­tion and a liv­ing example of how far you can get when you dream big. Now Dolla has money to expand to The Bahamas and to the East­ern Carib­bean. We have been cap­it­al­ised to fund Ultra, our asset-based lender, and still be able to reserve cap­ital for acquis­i­tion oppor­tun­it­ies. None of this would be pos­sible without the belief of our bond­hold­ers, both indi­vidu­als and insti­tu­tional,” Mairs added, regard­ing the com­pany’s grow­ing ambi­tions.

“Dolla was formed not only to provide fin­an­cial sup­port to entre­pren­eurs — MSMES — but also to be an inspir­a­tion and a liv­ing example of how far you can get when you dream big. Now Dolla has money to expand to The Bahamas and to the East­ern Carib­bean. We have been cap­it­al­ised to fund Ultra, our asset-based lender, and still be able to reserve cap­ital for acquis­i­tion oppor­tun­it­ies. None of this would be pos­sible without the belief of our bond­hold­ers, both indi­vidu­als and insti­tu­tional,” Mairs added, regard­ing the com­pany’s grow­ing ambi­tions.

Dolla has a sub­si­di­ary in Guyana and has been explor­ing other mar­kets in the Carib­bean to grow its lend­ing busi­ness. It launched Ultra Fin­an­cier Lim­ited on Novem­ber 1, which is being led by David Hen­riques, under a focus of lend­ing against lux­ury and prime assets. It is to be cap­it­al­ised with $350 mil­lion from the bond offer. The com­pany also inten­ded on lend­ing $300 mil­lion each month once it received the bond pro­ceeds, which are sep­ar­ate from the com­pany’s ambi­tions to acquire other com­pet­it­ors or their loan port­fo­lios.

Dolla has a sub­si­di­ary in Guyana and has been explor­ing other mar­kets in the Carib­bean to grow its lend­ing busi­ness. It launched Ultra Fin­an­cier Lim­ited on Novem­ber 1, which is being led by David Hen­riques, under a focus of lend­ing against lux­ury and prime assets. It is to be cap­it­al­ised with $350 mil­lion from the bond offer. The com­pany also inten­ded on lend­ing $300 mil­lion each month once it received the bond pro­ceeds, which are sep­ar­ate from the com­pany’s ambi­tions to acquire other com­pet­it­ors or their loan port­fo­lios.

“It is good to see Dolla again fol­low­ing its recent list­ing on the JSE Junior Mar­ket in June 2022 of this year. Today, you’re list­ing your vari­able secured cor­por­ate bonds on the JSE Private Mar­ket which is a board of the JSE designed to sup­port the con­tin­ued growth and devel­op­ment of the Jamaica exempt dis­tri­bu­tion mar­ket,” said JSE Chief Reg­u­lat­ory Officer Andrae Tul­loch.

Dolla has seen a slew of dir­ect­ors and exec­ut­ives pur­chas­ing shares in recent weeks with 20 mil­lion shares pur­chased at $3.50 on Novem­ber 17. It also declared a dividend of $0.0376 or $94 mil­lion to be paid on Decem­ber 7. Dolla’s stock price cur­rently trades at $3.19, which val­ues it at a $7.97-bil­lion mar­ket cap­it­al­isa­tion.

“If there is one com­pany that epi­tom­ises that bullish­ness on Jamaica and should be the hall­mark of com­pan­ies look­ing to grow their busi­ness to expand out­side of Jamaica and the wider Carib­bean, I think the case study should be Dolla. Dolla has paved the way of how to do it from private equity to pub­lic equity and to now rais­ing a bond,” said assist­ant vice-pres­id­ent for cap­ital mar­kets at VM Wealth Man­age­ment Lim­ited Dwight Jack­son.

Source: https://www.pressreader.com/jamaica/daily-observer-jamaica/20221201/281822877819517