– poor households, under-skilled communities to get special attention
Stabroek Business has been informed that the first phase of the long-awaited small business support project, officially titled ‘Micro and Small Enterprise Development and Building Alternative Livelihoods for Vulnerable Groups’ will get underway in January next year.
The project, which is being executed by the Ministry of Tourism, Industry and Commerce through the Small Business Bureau (SBB), will oversee the disbursement of US$10 million from the Guyana REDD +Investment Fund (GRIF) to support the countrywide development of small and micro enterprises and to create business options that will provide a livelihood for vulnerable groups.
The source of the GRIF derives from an agreement reached between Guyana and Norway and concretized in a 2009 Memorandum of Understanding under which Guyana would receive financial support of up to US$250 million based on results achieved by the country in limiting emissions from deforestation and forest degradation. The funds, for which the World Bank is trustee, are to be used to support the implementation of Guyana’s Low Carbon Development Strategy (LCDS). The Government of Guyana has identified the development of small and micro enterprises and providing alternative livelihoods for vulnerable groups as a key component of the LCDS.
The launch of the project will effectively herald the long-awaited kick start of the SBB, the state-run institution created out of the 2004 legislation that gave birth to the Small Business Act. Phase One of the project, scheduled to be rolled out between 2012 and 2013, will see the project expend US$5 million of a US$10 million allocation. Chief Executive Officer of the Bureau Derrick Cummings told Stabroek Business earlier this week that staff of the organisation had been visiting Linden as part of a planned countrywide sensitisation programme aimed at ensuring that vulnerable communities become aware of how the project could benefit them. Cummings said the project would focus on unclogging two of the major bottlenecks that constrain the ability of local micro and small enterprises to grow, the first being their limited access to finance and the second being technical and business skills deficiencies.
Providing improved access to capital and financial services is high on the list of the project. An official document, which provides details of the project, points out that “providing improved access to to capital and financial services helps households meet basic needs and protects against risks.” The thrust of the project is also predicated on the view that “improved financial services promote long-term self-sufficiency and wealth-creation strategies.”
The bureau will facilitate access to finance for MSE’s through two mechanisms. First, a Mutual Guarantee Fund (MGF) will be set up to guarantee part of the collateral of a loan, thereby positioning the borrower to secure loans at affordable rates. Second, the bureau will operate a Low Carbon Grant Scheme to assist vulnerable persons with viable business propositions. In this instance the bureau will apply financing to a training voucher scheme that will enable MSE’s to obtain the skills they require at existing training institutions. Cummings told Stabroek Business that some local entities including Republic Grant Guyana Ltd, the Institute for Private Enterprise Development (IPED) and EMPRETEC have already been identified as institutions with which the bureau was likely to partner in the execution of the project. He said other training institutions will, over time, be approached to help meet the training needs of the project.
In addition to those components associated with access to finance and training the project will also consider the creation of an Innovator Incubator Hub which will enable MSE’s to quickly develop and become competitive through networking and providing access to sources of funding, media exposure and a knowledge centre. The project will also consider the creation of an MSE Business Centre to support the startup of small businesses through advisory and technical assistance, business counselling, business plans and financial projections.
Another critical component of the project is its Low Carbon Grant Scheme, a pool of money which will be set aside to assist vulnerable persons for existing or potential business ventures. Persons who are already operating business enterprises and require additional financing will be eligible for funding under the Low Carbon Grant Scheme.