Although the small business sector has made a significant contribution to Barbados’ economy, inadequate access to financing is still a major headache for potential entrepreneurs.
Consultant to the Commonwealth Secretariat, Viswanath Anand, identified funding as one of the main stumbling blocks that have impeded the development of the small, micro and medium-sized enterprises. His report compiled for Government, titled The Strategy for Development of Micro Small and Medium Enterprises (MSEs) in Barbados, was presented to Minister of Trade, Industry and Commerce, George Hutson, at the Ministry last Wednesday.
Since banks were uneasy about financing small entrepreneurs, Mr. Anand made an appeal for greater dialogue with the financial services sector to address this matter. “In the English-speaking Caribbean countries, certain banks have had such a monopoly, that they never really had the motivation to extend themselves and reach out. But, I think, that the time has come that we need to have a dialogue with banks as to what are their constraints, perceptions, misconceptions as to why they do not look favourably at small enterprises,” he declared.
“On the other hand,” said Mr. Anand, “one also needs to hear what is the bank’s position regarding small business financing. The banks also have become kind of a whipping horse… but I think that we also need to understand what is their point of view. Are they getting proposals or applications that are not well thought out?”
Noting that the Caribbean was vulnerable to natural disaster, had limited natural resources and was susceptible to the trickle down effects from the global economic crises, the consultant advised technocrats to “garner their resources and refocus our thinking with regard to the development of the small, micro and medium enterprises”.
“And I think now is not a moment too soon,” he said, noting that “small, micro and medium enterprises provided employment, assisted with poverty alleviation, built an entrepreneurial spirit and contributed to an island’s GDP and exports.”
Pointing to Barbados’ stable political and economic environment, enabling elements for private enterprises and private and public institutions that provided debt financing to small and medium enterprises (SMEs), Mr. Anand disclosed that the recommendations within the report were designed to strengthen the existing resources and mechanisms that would create an enhanced enabling environment for the creation of SMEs.
However, Mr. Anand added that one of the findings in the document revealed that there was an absence of a clearly-defined vision, articulated by government, regarding the development of the sector. “While the Barbados Government is committed to the development of small businesses, there is no single intent which is expressed in one document, which lays down the vision that Government has for the sector, the objectives to be achieved, what mechanisms are put in place and what are the methodologies through which this is going to be achieved?”
Given this situation, Mr. Anand called for an urgent review of the sector in light of the current economic crises. “To repeat what I said earlier, the recent global downturn necessitates an urgent review of the sector with a focus on data collection, with sub-sector disaggregation and details on employment generated and growth prospects.”
He observed that “the sector has been the responsibility of a number of ministries and agencies in the Government and this needs to be streamlined in the sense that, it must be clearly stated up front, which ministry is going to be accountable for ensuring that Government’s objectives are met”.
While querying what Government’s objectives were, he suggested, “It would have to be the output of a comprehensive review of the sector to determine which sub-sectors of the country has strength and identify where public sector monies need to be spent in order to provide the necessary infrastructure and resources. And this policy would also lay down a road map which would give an indication as to the expectations that would be realised within a particular time frame,” Mr. Anand emphasised.