Dolla Financial Seeks J$1.5 Billion in Fresh Capital Through New Bond Offer

Microfinance firm Dolla Financial Services is set to raise up to J$1.5 billion in fresh capital through a new secured bond issue scheduled to open next week. The move is part of the company’s broader growth strategy aimed at expanding its loan portfolio and reducing debt obligations due in 2025.

Key Details

The two-tranche bond offer officially opens on October 23 and is expected to close on November 13.

According to the company’s prospectus, Tranche A will offer J$500 million over five years at an interest rate of 12 per cent, while Tranche B will raise another J$500 million over three years at 11 per cent interest.

Dolla Financial has also reserved the right to upsize the offer by issuing an additional J$500 million, bringing the total possible raise to J$1.5 billion.

The bonds will be secured by a debenture creating a fixed and floating charge over all the company’s assets, providing investors with added security.

Use of Proceeds

The company said the funds will primarily be used to:

• Expand its loan portfolio to meet rising demand.

• Repay existing indebtedness, including approximately J$570 million due in October 2025.

• Cover issue-related expenses, estimated at no more than J$30 million, inclusive of GCT.

Financial Covenants

The bond offer is supported by specific financial covenants to maintain balance sheet stability:

• Maximum leverage ratio: 4.5x

• Minimum interest coverage ratio: 1.50x

• Maximum net debt to equity ratio: 4.0x

Interest on the bonds will accrue daily, calculated on a 360-day year, and paid quarterly on March 30, June 30, September 30, and December 30 each year. The first payment date will be December 30, and interest will start accruing from the date an investor receives allocation confirmation.

The company also intends for the secured bonds to be listed on the Jamaica Stock Exchange (JSE) bond market within 21 days of the closing date.

Performance and Growth

In his message to investors, Chairman Walter Scott, KC, highlighted Dolla’s impressive financial trajectory, noting that the company’s loan portfolio climbed to J$4 billion, a 63 per cent increase year-over-year, representing J$1.5 billion in growth.

“This exceptional growth was fueled by elevated disbursements, with the most significant surge in the latter part of Q4 2024, funded in large part from the debt raise described below,” Scott stated in the prospectus.

He further noted that since 2018, Dolla’s net loan portfolio has achieved a compound annual growth rate (CAGR) of 79%, demonstrating the company’s scalability and resilience in Jamaica’s competitive microfinance sector.

Strategic Focus

Scott credited the company’s success to targeted marketing campaigns, strategic partnerships, and an emphasis on client-centric solutions designed to meet the evolving needs of its expanding customer base.

“These initiatives translated into increased demand for Dolla’s lending solutions, enabling us to serve a growing base of individuals and businesses across both local and regional markets,” he said.

In 2024 alone, Dolla disbursed over J$2.4 billion in loans, reinforcing its position as one of the leading micro-lenders in the region.

Market Outlook

Dolla Financial’s continued investment in lending operations comes amid sustained credit demand from small and medium-sized enterprises (SMEs) and individuals seeking access to flexible financing.

Industry analysts expect the new bond to attract both institutional and retail investors seeking higher-yield instruments in a relatively stable local credit environment.

The company’s strong historical performance, secured structure, and consistent growth record may enhance investor confidence ahead of the offer’s launch.

Our Opinion

Dolla Financial’s new bond issue represents a strategic and calculated move in Jamaica’s evolving financial sector. The company’s decision to secure its obligations while maintaining disciplined financial covenants signals confidence in its operations and long-term growth prospects.

As micro-lending continues to play a vital role in supporting entrepreneurship and small business development, Dolla’s expansion and capital market activity underscore how financial inclusion can coexist with robust corporate governance and investor returns.

Investors will be watching closely to see whether this bond performs as strongly as previous raises — and how Dolla continues to leverage its growing brand strength across the Caribbean.