Giving a ‘leg up’ to the small business sector
One of the frequently discussed business issues in Guyana is the extent to which opportunities exist for the growth of the enterprises in the small business sector. The discourse has embraced whether or not small business owners have sufficient access to either start-up capital or loans with which to expand or consolidate their enterprises; whether or not local commercial banks are sufficiently mindful of the importance of giving ‘a leg up’ to those small businesses that contribute so much to employment and to the economy as a whole; whether or not the proprietors of these various small businesses are sufficiently schooled in the running of a business enterprise and whether or not their businesses are set on a sufficiently sound entrepreneurial footing to cope with the kinds of storms that sometimes afflict these types of enterprises.
The discourses have yielded some interesting outcomes including efforts by local commercial banks to make public the various services they provide for the sector. There has also been, the promulgation of the Small Business Act and the subsequent creation of the Small Business Bureau; the support offered by the Guyana Office for Investment (Go-Invest) and other state agencies in assisting small businesses of various types to attend local and international fairs and exhibitions and with the packaging and marketing of their products; and the move by the Georgetown Chamber of Commerce and Industry (GCCI) to create a membership category for small businesses. Not to be omitted, of course, is the role which the lending agencies like IPED has played in shaping their portfolios to respond the needs of small and micro businesses.
For all these initiatives, complaints continue to emanate from small business operators about what they generally term “lack of opportunity,” which, once you probe them aggressively enough, invariably turns out to mean a lack of access to financing to grow their businesses.
Sometimes they have a point. The simple fact is that whatever arguments the commercial banks may make to the contrary, the borrowing requirements of small businesses often conflict with the judgments of banks with regard to whether or not their businesses are sustainable and those judgments are not always based on the most careful investigation.
Sometimes the small business persons don’t have a point. There have been cases in which there has been a decided lack of concrete evidence that a small business is worth the risk that a commercial bank is asked to take and the owners of these businesses do not always appear particularly mindful of the fact that the commercial bank’s first order of business is the interests of its depositors.
At this year’s GuyExpo we met a number of small business owners of various persuasions who have made varying degrees of progress in growing their businesses. In some cases, growth had been slow and painful and in most of those cases blame was placed at the feet of either government or the lending entities for the existing state of affairs. What we found, however, was that the disappointments aside, most of these small entrepreneurs continue to endure, to proceed with a healthy measure of optimism, imbued with the realization that they have no choice.
In this regard particular mention should be made of the groups of individual women agro processors who have banded themselves together under the Women Agro Processors Development Network and who, with some help from IICA, VSO and some supermarkets in Georgetown have been able to overcome hurdles of distance and logistics to secure markets for their products in Georgetown and even to aspire to overseas markets. These women, we believe, have made strides forward because they have no choice. Agro-processing is their livelihoods.
There are some signs of positive strides in the direction of helping small businesses to grow. Last week we reported that the Small Business Bureau will soon begin to work among small and micro businesses in Guyana and that – according to its Chief Executive Officer Deryck Cummings – the bureau will be concerned with, among other things, undertaking initiatives that directly address some of the more pressing needs of the small business sector including training for small entrepreneurs and support in areas such as product presentation and product promotion.
While this newspaper welcomes the announcement about the Small Business Bureau we are reminded of the fact that the legislation that brought the bureau into being is more than 12 years old. Accordingly, and for the moment we will take the bureau at its word that not a great deal more time will elapse before it begins to play a major role in the development of the small business sector.
We are reminded too of the recent announcement by the GCCI regarding the creation of a category of membership for small businesses, a positive step given the oft-expressed need for advocacy and mentoring for small businesses. Again, we urge not only that the GCCI hasten in its move to make members of small businesses but for the various other umbrella business organizations to become more aggressive advocates for small businesses.
Our own assessment of the condition of the micro and small business sectors is that in the absence of outside support most of them are, at best, likely to remain at their present levels or, more likely, eventually succumb to the harsh conditions against which they have no defence. The problem is that if we accept that small businesses account for most of the private sector jobs available in Guyana, we really have little choice but to seek to keep those businesses alive and to help them to grow. The possibilities, in our view, are eminently reasonable.