Micro, Small and Medium-Sized Enterprises (MSMEs) are important drivers of economic
growth and development in Jamaica. The numerous challenges facing MSMEs in Jamaica are
both internal and external to their operations. The prevalence of business informality among
Jamaican MSMEs poses a challenge to the growth and development of the sector. MSMEs in
Jamaica also encounter challenges with marketing their goods and services, both locally and
internationally, managing high energy cost and untapped wealth tied up in idle assets. These
challenges have led to business closure, retarded growth in business and reduced
competitiveness. It is imperative that the impediments to the formation and sustainable
development and growth of businesses in the MSME sector be significantly reduced, if not
PROFILE OF THE MSME SECTOR
Size and Composition of MSME Sector in Jamaica
The number of non-agricultural micro and small businesses in Jamaica increased from 36,780 in
1983 to 88,850 in 1990. Own Account Workers (i.e. those who operate a business but do not pay
staff) accounted for 35.9 per cent of the employed labour force in 2011. A more recent estimate
of the total number of MSMEs is presently not available. More than half (55.7%) of the MSMEs
surveyed were involved in the Wholesale and Retail Trade and 23.3% operated in the
Community, Social and Personal Services sectors. Studies show a gradual increase in the per cent
of non-agricultural micro and small enterprises involved in the Trade Industry.
Businesses in Jamaica are obligated under law, to comply with licensing, registration and tax
requirements and procedures in order to be recognized as formal. There are several basic legal
requirements for individuals and organizations operating businesses in Jamaica.
Registration and Licensing:
● Registration with the Companies Office of Jamaica in accordance with either the
Companies Act or the Registration of Business Names Act
● Be licensed as required under Licence on Trade and Business Act, Spirit Licence Law,
Hotel Licence etc.
● Tax Compliance and Statutory Deductions
● Obtain Taxpayer Registration Number (TRN)
● File and make Income Tax payments (as required)
● Obtain Tax Compliance Certificate (as required)
● Register to pay General Consumption Tax (GCT) and make payments for all taxable
activities Pay Education Tax
● Contribute to National Insurance Scheme (NIS)
● Contribute to Human Employment and Resource Training (H.E.A.R.T.)
● Register with the National Housing Trust (NHT) and make contributions, as required by
● Practice Good Record Keeping
● Submit Employer’s Annual Return Form
Informality in the economy is mirrored by informality among micro and small enterprises.
56.9% of the micro and small businesses in Jamaica were located in urban areas, according to
two surveys. The 2008 survey found that the majority of businesses are located in the
Metropolitan and Other Urban Areas; Kingston (15%), St. Andrew (22%) and St. Catherine
Ownership Structure and Management
Owner-managed businesses represent the majority of non-agricultural micro and small.
Businesses with 1-4 paid employees accounted for 39.9%, 46.6% and 24.4% in 1983, 1990 and
1996. Just 23% of businesses surveyed used account books and 21% had business plans.
Financial System Participation
Only 11% of micro and small firms applied for a loan in the year before the survey and only 8%
were successful. 33% of micro-enterprises and over three quarters (77%) of small firms
possessed bank accounts, according to the study. More than half (53.2%) of MSMEs surveyed
continued to use their own savings to finance business activities. 16% relied on family members,
12.4% accessed funds from banks and 5.6% from the credit, according to the survey.
Customers and Supplier
The IDB study showed that 90.3 per cent of micro and small businesses surveyed provided goods
and services to local individual customers. Though variations were reported for the different
enterprises, overall Only 2.8% and 2.3% of micro and small businesses sold to private
enterprises and wholesale and retail customers respectively. The availability of credit was
limited, with less than 20% of the firms surveyed being able to access any type of credit from