Small business blues

Barbados’ small business owners exist in an unfriendly environment that is stifling growth and impacting national economic activity, says UWI consulting executive director, Lisa Cummins.

In the circumstances, the senior UWI official called for fresh thinking outside the norm to propel this sector.

Cummins, who heads the University of the West Indies subsidiary firm, said a negative operating environment for small businesses in Barbados was the latest in a series of struggles for the sector that collectively accounts for the largest share of commercial activity.

Citing findings of a Barbados Small Business Association-commissioned research conducted by the Sir Arthur Lewis Institute of Social and Economic Studies, she said 90 per cent of firms here fall into the general category of small business.

Cummins asked over the weekend, “How is it possible that we score so poorly on the enabling environment that supports their growth?”

Addressing the Barbados Labour Party’s 79th Annual Conference Friday night, Cummins said:  “We score poorly in areas like dealing with regulations, customs efficiency clearing, state of cluster development, trademark registration, and simple things like website presence.”

Cummins is a veteran of regional development, trade, international relations and recently served as executive director of the Barbados Coalition of Service Industries.

She noted: “Our business support organizations and our national trade promotion organizations need to be re-imagined and transformed.”

Recently, Minister of Industry, Commerce and Small Business Development Donville Inniss, told those attending the 2017 SBA Awards Ceremony, “I am always challenged by those who approach Government agencies, lending agencies included, seeking assistance and advice and be treated in the worst possible manner.

“One of the challenges that I face sometimes is that many on my side of the public sector do not connect with what others on the other side are facing.”

Inniss spoke of bureaucracy that hindered business facilitating agencies. He accused them of seeing business people who needed assistance as “numbers on a piece of paper, part of a balance sheet. Sometimes they don’t appreciate what that individual is going through to fulfil their dreams.

“And then you say to them you need four, five guarantors.”

“That must come to a screeching halt,” said the Minister.

He told the gathering at Radisson Aquatica Resort, “I directed Fund Access with immediacy to be more flexible in their lending policies towards the micro, small and medium enterprise sector in Barbados.

“There are just too many Barbadians whose dreams are being dashed aside because we are not flexible.”

Meanwhile, Senator John Watson, the first Small Business Association president, told Barbados TODAY the Minister’s comments were significant because, “[Inniss] is actually saying that they are not friendly . . . . That is his ministry, all he has to do is go in there and tell them what to do. He doesn’t have to ask them in a public forum to do that.

“It might also mean that he is frustrated by not getting it done.”

The Senator suggested that the frustration at the top might be in getting lending officers into the frame of mind of dealing with the needs of micro business borrowers then switching mode to respond to those requiring much larger funding.

 “There is a difference between lending a person $1 000 and lending a person $20 000. The mindset that you have lending out $20 000 and $40 000, you can’t get down to understanding lending out a$1 000.

“That is where Fund Access has its problem because a lot of people may go there looking for $2 000 to $5 000 [but staff] are more interested in $20 000 and $40 000 loans where you’re talking about a business plan and two or three years of financial statements and guarantors.

“A $1 000 loan only means you have to understand the character of the person, and if the person has good character you could lend the money and the next loan you give might be $5 000 and it builds up from there.”

Khalil Bryan an entrepreneur focused on improving transportation using technology has complained that though Fund Access and Barbados Investment Development Corporation have “fantastic programmes” the lending policies of these agencies are still in the bricks and mortar mode where they are happy assisting those with assets that can be repossessed.

“We need enabling policies . . .  that say to start-ups you don’t need to conform to the same regulations as a traditional business . . . You need a different group of rules that you can fall under,” he told Barbados International Business Association panel discussion earlier this month.

Bryan reported that those Government agencies failed to grasp his investment concept and he and teammates were forced to look elsewhere.

“What we’ve experienced is that the group that is actually giving us money . . .  $20 000 was the Barbados Public Workers Credit Union Limited.

“They said ‘we want to give people money’. They have shown that they want to give people money.

“We need to have a portfolio of start-ups, of medium-sized companies, of large companies. then you [will] start seeing investment growth.”

Source: By George Alleyne

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