Jamaica Intellectual Property Office (JIPO) is upbeat about the prospect of commercial banks accepting intellectual property (IP) as collateral to provide financing to micro, small and medium-sized enterprises (MSMEs).
At the most recent Jamaica Observer Press Club where the concept of IP-backed financing to access business loans was discussed, JIPO’s Project Manager Kayanne Anderson stressed that as the economy continues to evolve, all players, including commercial banks, must find new ways of doing business.
“What we have to understand in this economy is that we are actually in a disruptive economy, not a set or fixed economy. The fiat currency system is itself being disrupted. We are in a high-risk period, every decision we make has high risk, so it takes boldness, courage, and being able to push beyond,” she stated.
Anderson explained that IP assets require a patient approach, pointing to the bold investment strategies of venture capitalists with start-ups and IP owners investing in these businesses to help them grow.
“The capital rich go after those guys. There is value there,” said Anderson, who was among a panel of experts in IP and commerce at the Press Club, which included Dr Norman Dunn, state minister for industry, investment, and commerce; Martin Brassell, chief executive officer of UK firm Inngot Limited, experts in intellectual property and intangibles, and IP and finance law; and Lilyclaire Bellamy, JIPO’s executive director.
Anderson noted that JIPO is already laying the foundation through its pilot on IP-backed financing, providing training in IP monetisation, and building awareness among banks, businesses, and assets valuers. JIPO has so far secured the commitment of two major commercial banks for the pilot, to test financial products against IP assets.
“We have reached out to the commercial banks, we have worked with the Jamaica Bankers’ Association (JBA) very closely, at the executive level â€” the JBA is committed to this process. We have also trained the commercial banks in valuation,” she said, noting that JIPO has trained credit risk and adjudication managers from seven commercial banks in advanced IP valuation, along with seven independent valuers, and two from the central bank.
“Building the cadre of professionals and building the understanding of how to value IP across the board [with] independent persons who can provide this as a service as well as the commercial banks themselves who are dealing with the assets when they come to them, and the central bank, which has to deal with the regulations, we found so much value from having taken that approach. It was out of that training process that all the commercial banks wanted to be involved in the pilot,” Anderson explained.
JIPO says the plan is to have companies involved in the pilot submit their loan applications to the banks by the end of December, after which the firms’ performance will be monitored. The pilot project is slated to end in March 2023.