Report on the Jamaica Stock Exchange Micro Market Initiative and its Alignment with Sustainable Development Goals

Executive Summary

The Jamaica Stock Exchange (JSE) is establishing a new micro market platform designed to facilitate equity capital raising for micro-enterprises. This initiative, developed in collaboration with key public and private sector entities, aims to address critical funding gaps for Micro, Small, and Medium-sized Enterprises (MSMEs). The project strongly aligns with several United Nations Sustainable Development Goals (SDGs), particularly those focused on economic growth, innovation, reducing inequality, and fostering partnerships.

Initiative Overview and Key Features

The JSE Micro Market is being launched to support the growth of Jamaica’s smallest formal enterprises by providing a regulated platform for raising capital.

• Capital Raising Threshold: The market will enable companies to raise between $10 million and $49.9 million in equity capital.
• Target Entities: The platform is specifically for micro-companies classified within the MSME sector.
• Listing Requirements: Aspirants must meet specific criteria to ensure transparency and viability, including:
  1. Establishment of proper governance structures, including a board of directors.
  2. Implementation of systems for the timely production of quarterly financial reports and audited annual accounts.
  3. Employment of a dedicated business manager to oversee operations.
• Anticipated Benefits: Companies listing on the micro market are expected to gain significant advantages, such as access to affordable capital, improved loan terms from banks, greater attractiveness to investors, and formal integration into the mainstream economy. Tax incentives, similar to those offered on the JSE Junior Market, are also anticipated.

Alignment with SDG 8: Decent Work and Economic Growth

The JSE Micro Market initiative is a direct catalyst for achieving SDG 8. By providing MSMEs with access to previously unattainable equity capital, the platform empowers them to expand operations, innovate, and scale. This growth is fundamental to creating new and sustainable employment opportunities, thereby promoting decent work and contributing to Jamaica’s overall economic growth.

Alignment with SDG 9: Industry, Innovation, and Infrastructure

This initiative represents a significant innovation in Jamaica’s financial infrastructure, directly supporting SDG 9. The creation of a dedicated stock market for micro-enterprises enhances the inclusivity and resilience of the nation’s financial systems. It promotes sustainable industrialization by giving smaller businesses the tools to grow, compete, and contribute more robustly to the national economy.

Alignment with SDG 10: Reduced Inequalities

A primary objective of the micro market is to democratize access to capital, a key driver in achieving SDG 10. Micro-businesses have traditionally been excluded from capital markets, creating a barrier to growth and widening economic disparities. By establishing this accessible platform, the JSE actively works to reduce inequality, empowering smaller entrepreneurs and fostering a more inclusive economic landscape.

Alignment with SDG 17: Partnerships for the Goals

The development of the micro market exemplifies the multi-stakeholder collaboration championed by SDG 17. The project’s success relies on a robust public-private partnership that provides essential training, mentorship, and regulatory oversight. Key partners include:

• Jamaica Stock Exchange (JSE)
• Jamaica Business Development Corporation (JBDC)
• Development Bank of Jamaica (DBJ)
• Jamaica Securities Dealers Association (JSDA)
• Bank of Jamaica
• The Ministry of Industry, Investment and Commerce
• The Ministry of Finance

Implementation Timeline and Projections

The JSE Micro Market Steering Committee commenced deliberations in June, with a clear timeline for implementation.

• Launch Window: The market is expected to go live in less than a year.
• First Listing: The first company is projected to list by April 2026.
• Company Pipeline: Over 200 micro-companies, identified through the JBDC and DBJ, are in various stages of preparation.
• Initial Phase: The market is expected to launch with an initial cohort of approximately 20 enterprises.
• Growth Target: The JSE aims to have 25 companies listed on the micro market within its first two years of operation.

Stakeholder Perspectives and Considerations

While the initiative has been widely supported, industry stakeholders have raised points for consideration. The President of the Small Business Association of Jamaica has highlighted the need for greater sensitization to ensure businesses are aware of the opportunity. Furthermore, the President of The MSME Alliance has called for greater transparency and inclusion in the planning phase, noting the organization was not invited to the inaugural steering committee meeting. Addressing these concerns will be crucial for ensuring the initiative’s equitable success and broad-based support.

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article on the Jamaica Stock Exchange’s (JSE) new micro market addresses several Sustainable Development Goals (SDGs) by focusing on economic growth, financial inclusion for small businesses, and collaborative efforts between public and private sectors. The most relevant SDGs are:

• SDG 8: Decent Work and Economic Growth: The core theme of the article is the creation of a financial platform to help micro, small, and medium-sized enterprises (MSMEs) grow. By providing access to equity capital, the micro market aims to foster entrepreneurship, support the formalization of businesses, and stimulate economic activity, which are central tenets of SDG 8.
• SDG 9: Industry, Innovation, and Infrastructure: The establishment of the JSE Micro Market is an innovation in financial infrastructure. It is designed to increase the access of small-scale enterprises to financial services, helping them to scale up and integrate into the broader economy, which directly aligns with the goals of SDG 9.
• SDG 17: Partnerships for the Goals: The article explicitly details the collaborative nature of this initiative. It highlights a multi-stakeholder partnership involving the JSE (a private entity), government bodies like the Jamaica Business Development Corporation (JBDC) and the Development Bank of Jamaica (DBJ), and various ministries. This collaboration is essential for achieving the goals and is the focus of SDG 17.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the initiatives and goals described in the article, several specific SDG targets can be identified:

1. SDG 8: Decent Work and Economic Growth

   • Target 8.3: “Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services.”
     
     Explanation: The article’s entire focus is on creating the JSE Micro Market to provide MSMEs with access to equity capital (“$10 million to $49.9 million”). This initiative is a development-oriented policy designed to encourage the formalization and growth of these enterprises, as they will be required to have “proper governance structures” and will become “more incorporated into the formal business system.”
   • Target 8.10: “Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all.”
     
     Explanation: The Jamaica Stock Exchange, a domestic financial institution, is expanding its services to create a new platform specifically for micro-enterprises. This action directly strengthens its capacity to provide financial services to a previously underserved segment of the business community, thereby expanding access.

2. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.3: “Increase the access of small-scale industrial and other enterprises, in particular in developing countries, to financial services, including affordable credit, and their integration into value chains and markets.”
     
     Explanation: The micro market is a direct mechanism to increase the access of small-scale enterprises to financial services (equity capital). The article states it will “ameliorate the problem of access to affordable or low-priced capital for microbusinesses.” Listing on the exchange also facilitates their “integration into… markets” by making them more visible and attractive to investors.

3. SDG 17: Partnerships for the Goals

   • Target 17.17: “Encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships.”
     
     Explanation: The article highlights the creation of the “Micro Market Steering Committee” and lists the partners involved: “the JSE, in partnership with the JBDC, DBJ, Jamaica Securities Dealers Association, Bank of Jamaica, the Ministry of Industry, Investment and Commerce, and the Ministry of Finance.” This is a clear example of a public-private partnership established to achieve a common development goal.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article contains several quantitative and qualitative indicators that can be used to measure progress towards the identified targets.

• For Targets 8.3 and 9.3 (Growth and Access to Finance for MSMEs):
  • Number of companies in the pipeline: The article mentions “a list of about 200 micro companies that are at various stages of readiness.” This serves as a baseline indicator of interest and potential uptake.
  • Number of listed companies: The plan is to “start with about 20 micro enterprises” and “grow to 25 listings within the first two years of its operation.” This provides a clear, measurable goal for the number of enterprises gaining access to finance.
  • Capital raised: The market is designed to facilitate “the raising of $10 million to $49.9 million in equity capital for micro companies.” Tracking the total capital raised by listed companies would be a direct measure of success.
  • Formalization requirements: Progress can be measured by the number of companies that successfully implement “proper governance structures, including a board of directors,” and begin “production of quarterly reports,” as required for listing.
• For Target 17.17 (Partnerships):
  • Existence and composition of the partnership: The formation of the “Micro Market Steering Committee” is an indicator itself. The list of participating organizations (“JSE, JBDC, DBJ,” etc.) demonstrates the establishment of a multi-stakeholder partnership.
  • Functionality of the partnership: The article notes that the committee “began deliberations on the market’s establishment just over a month ago, on June 12,” indicating that the partnership is active and working towards its goal.

4. Table of SDGs, Targets, and Indicators

Source: jamaica-gleaner.com