While there are fundamental issues Government will have to address to help small and medium-sized businesses overcome their challenges, the State cannot do it alone.
Minister of Industry, International Business, Commerce and Small Business Development, Donville Inniss, emphasised this recently, as he addressed the annual awards ceremony of Crumbz Bakery at the 3W’s Oval, University of the West Indies, Cave Hill.
Stating that Government had sought to address the matter of access to finance through agencies like Fund Access and the Barbados Investment and Development Corporation (BIDC), he noted that the former had been given additional funds to on lend, and BIDC had been adequately resourced to help with some financing arrangements.
However, he said he believed this country had to be creative as it looked to find new financing mechanisms for the micro and small enterprise sector. “And, as we reflect upon the fact that the commercial banks of Barbados today are actually not paying anything much of interest on the savings we have, we have to perhaps find creative ways of using that,” Mr. Inniss said.
While noting that there was about $9.4 billion in bank accounts across Barbados, he said 47 per cent belonged to private individuals and the balance to corporate entities, but this really was not earning any interest for those who held those accounts.
Outlining how it could be utilised, the Industry Minister said: “We can speak to issues of confidence and other factors that may restrict the ones taking that money and investing.
I think that the State now has a duty to start looking at creative ways in which it can assist this sector by using some of that money. And, my view quite frankly is that we’ve reached a point in our journey where from our end we must give active consideration to offering tax incentives to Barbadians to take some of their savings, monies on the commercial banks, and invest in micro and small enterprises in Barbados.
“You can take your money, invest through a structure, a regulated entity that then either on lends or invests in micro, small or medium enterprises and you may get a decent return on your investment.”
Cognisant of the fact that persons would not just take their money and invest, the Industry Minister hinted it may require an incentive for the individual or company that takes the money and invest in certain areas, through the tax system. Pointing out that such would give a level of protection; he said, more importantly, it would help this country to find low-cost capital to invest in research and development, and in growing out micro and small enterprises in the future.
“At the end of the day, we are all winners because you have a greater cadre of investors, businesses have the better level and cost of financing arrangement, and then of course, you are able to spur greater economic activity throughout this country and further afield,” Minister Inniss said.