JMMB Express Finance started in the business of providing unsecured loans to Trinidadians in September 2018 and in a little more than five years, according to its CEO Elson James, the company has grown to be the third largest lender of its kind in the local market behind Island Finance and Courts Ready Finance.
The unsecured lender has grown from one customer and two employees, in one branch, five years ago to 60 employees in five branches with 10,000 customers “and growing,” said James.
JMMB Express Finance is part of JMMB Group Ltd, the Kingston, Jamaica headquartered financial services company. JMMB Group owns JMMB Bank, JMMB Investments, and JMMB Express Finance in T&T.
JMMB entered the local market in 2005, when it acquired a 50 per cent stake in Intercommercial Bank Ltd (IBL). It completed the acquisition of the IBL Group in October 2013, when it purchased the 50 per cent of the company it did not own.
From its small base five years ago, JMMB Express Finance is now growing quickly: Its audited after-tax profit for the 12 months ended March 31, 2023 was $13.07 million, an 83.3 per cent increase over the $7.12 million it earned for the same period in 2022.
Its total assets, as at the end of March 2023, were $249.07 million, 36.7 per cent more than the same period one year prior. Loans and note receivable comprised 81.5 per cent of its assets. For its financial year ended March 31, 2023, the company’s gross loans and notes receivable totalled $215.07 million. Its net loans and notes receivable increased by 37.7 per cent to $203.1 million from $147.4 million
In an interview last Saturday, James said he is a corporate banker by trade, starting his career at Citibank in New York and then in Trinidad.
“After Citibank, I left to run Island Finance. I did that for three years. I left Island Finance and ran the consumer part of Unicomer for the region, all 14 territories,” said James. Unicomer trades as Courts throughout the region.
James stayed at Courts for five years before joining the JMMB Group.
“We started from nothing. It was me alone. Employee number two was my right hand, Roger Hutcheon.
“We built the team and started our first branch six months later (in September 2018). And here we are looking to expand,” said James.
JMMB Express Finance operates with a merchant bank licence, meaning it can only make loans and take deposits of one year or longer.
James said “the vast majority” of the customer base of JMMB Express Finance comes from salaried employees.
“Trinidad is a very unique market in the Caribbean, where the vast majority of the working population is salaried. This is not unique just to JMMB Express Finance. The vast majority of Courts Ready Finance and Island Finance clients are salaried clients because that’s the vast majority of the working population,” James said.
“We have a very high salaried population, which is very different to Jamaica, for example, where between 40 and 50 per cent is salaried. In Trinidad, anywhere upward of 80 per cent of our population is salaried. Across the board, that is who we lend to,” said the banker.
He said the reason a salaried employee would take an unsecured loan from JMMB Express Finance, with an interest rate of between 18 per cent and 26 per cent, rather than from a local commercial bank, where the interest rate would be lower, is affordability and convenience.
“One of the most important factors for a client is not so much interest rate, it is affordability and speed,” James said.
Using as an example a customer who takes an unsecured loan of $40,000, over three years at an interest rate of 18 per cent from JMMB Express Finance, he said that customer would be required to pay a monthly total of $1,446.
He compared that monthly payment with a customer who goes to a local commercial bank to borrow $40,000 over three years at an unsecured interest rate of 14 per cent. That customer would be required to make a monthly payment of $1,367.
The difference between the monthly payment at JMMB Express Finance and a local commercial bank is $79 a month.
“For the average person, yes there is a difference between 18 per cent and 14 per cent, but the $79 a month for the average person is something they can afford. They prefer to know that they will get the loan and not have to deal with the hassle and pay the additional $79 a month,” the banker said.
He said people who are looking to borrow $40,000 within T&T’s commercial banking sector have to set an appointment, get dressed and go into the bank “and then go through the wringer. It’s not an easy process to get a small loan from a local commercial bank.”
The process of getting a $40,000 loan from a local commercial bank would take a minimum of five to seven working days, James said, whereas a client can get a loan from one of the non-traditional lenders within 24 to 48 hours.
“The $79 difference between $1,446 and $1,367 is neither here nor there for that client, but they know they will get the loan today or tomorrow,” he said.
James said people in T&T are willing to pay high-interest rates for speed and convenience.
“In fact, people would pay significantly more. That’s why when Island Finance started, rates of 45 and 46 per cent were not unheard of. But it was the same salaried employee who said that what I have to go through at the bank is tantamount to maybe visiting a dentist.
“So people prefer to visit an Island Finance or a JMMB Express Finance to get a loan; they understand that the interest rate is higher, but they can afford the monthly payment, which is most important for the average person, not so much the interest rate,” James said.
He said another advantage that JMMB Express Finance has over its competition is that it charges no fees. It does not charge an origination fee or an administration fee. It does not charge its customers for the credit check that is done on all borrowers. It does not apply a pre-payment penalty and it does not even charge its customers for late interest payments on their loans.
Apart from not charging late fees, or any other fee, JMMB Express Finance allows its customers to complete and submit their loan application forms from their homes with a digital signature. And it does not stipulate that borrowers have to deposit loan proceeds into a JMMB Bank account. The lender is also flexible on from where people can make their loan payments.
The banker said the approach to personal financing in the local market can be seen in the penetration of credit cards, which he said is “very, very low.”
“So, even though we have many salaried employees, most of them do not have credit cards. If they do need some form of financing, it is this method of unsecured loans,” James said, adding, “We believe we have the ability to do it best in class, with that speed and no fees, which will change the market.”
His prediction for the non-traditional lenders is that over time, their interest rates will decline and would be more competitive with commercial banks’ unsecured rates.
James said, “To be fair to the commercial banks, they are not set up to do loans of $20,000 or $30,000. They have huge deposit bases, literally billions of dollars. So if they have to do loans of $20,000 and $30,000 loans, in the way they do other loans, it is just not economical for them.
“It makes sense for them when they start crossing the threshold of $100,000. It makes sense for commercial banks when they can drive efficiency up and drive the operating costs down.”
