Funding out of reach
Call for policy reform to help small businesses
Despite a number of funding agencies set up to assist small enterprises here, access to financing remains a number one hindrance to the development of the sector.
It is against this backdrop that president of the Small Business Association (SBA), Dalton Medford, has issued a call for a single entity to provide funding for players within the sector.
Medford was speaking at the opening of a one-day seminar Access To Finance: Debunking The Myths, Developing The Solutions at the Grande Salle of the Central Bank today.
Medford said access to finance was “a significant and enduring problem” for many micro, small and medium-sized businesses. And although successive governments had set up various schemes designed to remedy the problem, he said, there was still “a lot of work to be done in managing these schemes as a unified portfolio”.
He said there was a need for a clear vision to deliver what they were intended to achieve as well as a need for policy reform.
“We need to have a national vision and a clear strategy that has the buy in of both the public and private agencies that support the small business sector. It is my belief that we need to have a collective approach to small business,” said Medford.
“All agencies providing funding and technical assistance and advice to the sector should be housed and managed under one roof with an understanding that their role is one of developmental, one which will carry a high level of risk when making a loan and know that some will fail,” he added.
He said one of the main reasons many banking institutions were hesitant to lend to small business owners was because of a fear of high risks.
He said given the fact that Government could not control the lending policies of financial institutions, the single agency was necessary for start-up businesses and continual development of the sector.
“We may not want another development bank but a leopard by any name is still a leopard. If we want entrepreneurship then some arm of Government along with the private sector must come forward and take this role,” he said, adding that capitalization of the fund should be adequate to allow for continuous funding when necessary.
“Right now you have to go to many agencies in Barbados to conclude one agreement and that from time to time can be very costly to you. So that is why I say all these funds need to be housed under one area,” stated Medford.
He also called for publications to be made available to SME operators on where, and how to go about getting financial and technical assistance. He said there was also need for “a very strong research arm”.