THE SUNDAY GLEANER, MARCH 6, 2022 | BUSINESS C3 MOTOR VEHICLES FOR SALE “AS IS WHERE IS” UNDER POWERS CONTAINED IN BILL OF SALE LOCATION AT CARLAND - 37-39 Old Hope Road Kingston 5. Year Make & Model 2017 King Long RHD, Manual, 2494 c.c 2017 Toyota Hiace RHD, Manual, Diesel 2494c.c. 2013 Ford Focus (Brown) RHD, Automatic, 1596 c.c 2012 Toyota Prius (Purple) RHD, Automatic, 1790c.c ALL REASONABLE OFFERS WILL BE CONSIDERED FOR FURTHER INFORMATION, PLEASE CONTACT CREDIT ADMINISTRATION DEPARTMENT Telephone: (876) 960-8804 Ext. 5464 E-mail: fgbdelinqmgt@gkco.com NO SCALE SALE Calling AII Trucks! Marl Aggregate Limited 876-455-8245 While supplies last marl dust, dump marl, pit stones, boulders, top soil, 3/8, 1/ 4 or 2 inch stone available $500 PER YARD Any Material Crush N Run LASCO FINANCIAL Services Limited has received central bank approval to add another three remittance service providers to its network amid plans to expand its remittance business this year beyond the current 140 agent windows, especially in rural towns. The new additions, whose identities were not disclosed, will grow LasFin’s list of remittance partners to seven. Its agent network includes large groups such as Mobile Electronics, Prime Trust Financial, Paymaster, Credit Unions, and several independent business owners. LasFin has in recent times sharpened its focus on its remittance business, its largest income earner, which accounts for 42 per cent of the $2.3 billion in total revenues earned for year ending March 2021. The business segment grew more that 30 per cent in 2020, helped by the pandemic, as due to border closures and travel restrictions, money that normally would be passed hand-tohand by visiting relatives entered the remittance system instead. The gains were felt right across the market, pushing Jamaica’s remittance inflows to almost US$3 billion. The momentum continued into 2021, with remittances for the year hitting a new record at US$3.5 billion. But the market upswing also came with challenges for the financial services provider: the increased use of online money transfer services also meant cheaper transaction fees. Last year, LasFin added Boss Revolution as its fourth remittance partner to grow volumes and ultimately make up for any loss of revenue. “We started payment to Boss Revolution after several months of system development. We have been approved by the Bank of Jamaica for three others and are doing those developments next to roll out later in the year,” LasFin Managing Director Jacinth Hall-Tracey told the Financial Gleaner. Hall-Tracey did not name the new service providers. LasFin is the second largest player in Jamaica’s remittance market and serves as an agent for MoneyGram, Ria Money Transfer, and Remitly. Its chief rival is GraceKennedy Remittance Services, which is the exclusive agent for Western Union. LasFin’s business lines include microlending, cambio services or foreign exchange dealing, and remittances. The microfinance operations, which accounts for 26 per cent of revenues, is on the rebound from the COVID-19 squeeze on jobs and salaries workers and small businesses, groups that microlenders typically serve. Hall-Tracey is optimistic that the business will return to growth, aided by the $100 million in funding secured by subsidiary Lasco Microfinance from the Development Bank of Jamaica to onlend to SMEs on the path to recovery from the pandemic. Those borrowings in the December quarter add to a $1.2 billion facility that LasFin secured during the summer from JMMB Bank, money it has used for working capital and to refinance a $1.78 billion unsecured bond that was issued in February 2018. The loan proceeds boosted the company’s cash holdings by 75 per cent to $998 million as of December 2021. Hall-Tracey says the company expects to complete some initiatives that are key drivers to its growth in its 2022-23 financial year. “We operate in a very competitive and fastpaced environment, the dynamics of which can be very impactful on our revenues. Our intention is to position the company to lead on initiatives that drive growth or to seize growth opportunities once they arise,” she said. Within the December 2021 quarter, LasFin’s earnings grew five per cent to $130 million, driven by a 30 per cent increase in revenue. karena.bennett@ gleanerjm.com LasFin to add three more remittance partners ANNUAL RUM and spirits sales for the brands owned by Campari in Jamaica grew last year, but revenue remained just below prepandemic levels. Jamaica registered overall sales growth of 16.5 per cent relative to 2020 but was, basically, flat relative to 2019. The sales figures reflect local consumption and do not include exports. The local operations that fall under J. Wray & Nephew Limited (JWN) racked up revenue of €108 million in 2019, but the pandemic erased a substantial amount of the spirits market, carving down sales in 2020 to €91 million. Sales recovered last year to €106 million. Of note, the HY2021 sales, January to June, were above the comparative levels in 2019 and 2020. Campari Group said in its newly released annual report that JWN experienced “strong growth thanks to continued recovery in the on-premise driven by both domestic trade and international tourism recovery”. On-premise consumption relates to drinking at bars and restaurants while off-premise encapsulates liquor bought from supermarkets and other retailers and consumed by households and other groupings. Campari noted that JWN’s sales growth would have been 28 per cent in 2021 were it not for the local currency depreciating against the euro, the Italian company’s functional currency. In other words, sales would have likely surpassed pre-pandemic levels without currency depreciation. Campari translated earnings from Jamaica using an averaging rate of $178.34 to the euro in 2021 and $162.60 in 2020. At the group level, Campari’s annual sales grew 25.6 per cent to €2.17 billion, while profit climbed from €188 million to €285 million. For 2022, the outlook for the spirits sector remains sombre. “Regarding profitability, whilst we continue to leverage price increase opportunities to mitigate cost headwinds, the temporary input costs pressure is expected to further intensify during the current year, mainly packaging, raw materials, including agave, and logistics, hence postponing the gross margin accretion,” the Italian company said. business@gleanerjm.com JWN annual rum sales f lirting with pre-pandemic levels questions from operators about the legality of accepting repayments in US dollars. “The repayments in a foreign currency would not be a breach of Section 22 (of the Microcredit Act). The issue would have to be around trying to understand what are the sort of operational arrangements,” said Lewis. “For simplicity, it would be best that the person changes those funds first and then makes their repayment in Jamaican dollars. One you have a business model around receiving payments in US dollars, really what you need is a cambio licence because that’s how the framework operates. If it’s a one-off transaction here and there, that’s a separate matter. The Microcredit Act is a Jamaican-dollar thought process both in terms of lending and receiving funds,” he explained. He added that accepting US dollars also posed operational risks that microlenders should consider. “You might also have to think through the operational risks of being in the business of lending with a licence that, basically, circumscribes the lending activity to Jamaican dollars, and then having to go through a process of changing those US dollars, and the person who is on the other side of that transaction not having the clarity as to how you arrived at these funds. That would be an operational risk that you would expose yourself to because the persons who are changing that for you, at the back end, also have obligations to understand the source of those funds,” Lewis said. Head of microcredit supervision at the BOJ, Janice Smith, in a presentation on the requirements of the Microcredit Act, clarified that the law does not set prescribed levels of interest rates. “There appears to be some misconception in the market that the act imposes a limit on interest rates. That is not true. There is no such limit or cap under the legislation,” said Smith. “I think some persons may be confusing (provisions) that were in the bill but got removed before being passed. Institutions are free to establish rates based on the market and based on risks posed by the customer. There is a requirement for customers to be provided with information on the effective annual interest rate. The main stipulation around that is calculation of the rate, and where interest rates are being advertised, (the effective annual interest rate) should be the most prominently displayed rate,” she said. The central bank has said that it will consider providing applicants for microcredit licences with templates of various reporting forms once they make the request in writing. This followed calls for such assistance from microlenders, who said they were being quoted several million dollars by providers of business advisory and documentation services. The central bankers reported that several applications have already been received ahead of the July 30 deadline. They clarified, too, that it is expected that applicants, which are existing businesses, would be able to continue their operations even if their licence applications are not fully processed at the end of July as the licensing process could take between 30 and 90 days. “We will respond in the shortest possible time so that there is no disruption,” according to the central bankers. Microcredit licence applicants have been assured of acknowledgement of the receipt of their licence applications within five working days. At the same time, microlenders who have ceased lending, but at July 30, expect to have a significant loan portfolio for collection, are being encouraged to apply for a microcredit licence. “If your portfolio of existing loans prior to July 2022 would have a very long tail for repayment, I would recommend that you apply for a licence because you would be in the space for some time. Obviously, if that book of loans is pretty much maturing by July 2022, then application would not be necessary,” Dr Lewis advised. To avoid the need for licensing, he suggested that operators that have stopped lending but will possess a large collections portfolio at July should consider selling the loans to enable them to exit the business. huntley.medley@gleanerjm.com RATE CONTINUED FROM C1 Jacinth HallTracey, managing director of Lasco Financial Services Limited.
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