BRIDGETOWN, Barbados, November 27, 2008 – A just released report has shown that 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. And there has been a call for the matter to be rectified not only in this island, but across the Caribbean.
In a report entitled ‘The Strategy for Development of Micro, Small and Medium Enterprises (MSEs) in Barbados’, consultant to the Commonwealth Secretariat, Viswanath Anand, has identified funding as one of the main stumbling blocks impeding the development of these businesses.
He has therefore made an appeal for greater dialogue with the financial services sector to address the issue.
“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 said.
“On the other hand,” Mr Anand added, “one also needs to hear what is the banks’ 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”.
Mr Anand also 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, he noted, that one of the findings in the study was 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,” Mr Anand.
Given this situation, the consultant has called for an urgent review of the sector in light of the current economic crises.
“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 said.
He suggested a comprehensive review of the sector to determine which sub-sectors of the country has strength and identify where taxpayers’ money needs to be spent in order to provide the necessary infrastructure and resources.