Too many hurdles to small business development

BY Staff
Published: August 29, 2008 in Business

- GSBA President
The establishment of a Credit Bureau to help provide funding for the development of small and incubating businesses remains one of the main hurdles to the creation of a thriving small business sector in Guyana, according to President of the Guyana Small Business Association (GSBA) Patrick Zephyr.

Speaking with Stabroek Business earlier this week Zephyr said that the setting up of the Guyana Small Business Council two years ago has not been attended by the kind of momentum necessary to move small business in Guyana forward.
Zephyr, who is himself a member of the Council told Stabroek Business that promised state funding for the Council has not be forthcoming and that the agreed setting up of a Small Business Bureau has not been forthcoming. He said that while the GSBA has been seeking to build its membership by providing training programmes and small business support projects with the assistance of funding agencies more financial support was needed for the small business sector.

According to Zephyr a decision had been taken since last year that the National Competitiveness Council is to provide funding to the Small Business Council in order that the Council could extend assistance to local small business organizations including the GSBA. “The problem here is that the Small Business Council has been asked to secure a consultancy to outline its programme of activities and this has not been produced as yet.”

Zephyr disclosed that during the first year of its operations the Small Business Council received a subvention of $1m from government and that that figure had been increased to $1.5m in the second year. “Those sums are simply not enough,” he added.
Zephyr said that President Bharrat Jagdeo had indicated that government’s support for the Small Business Council was dependent on the preparation of a detailed work programme which set out the plans of the Council for supporting the small business community in Guyana. “My own impression is that the President is supportive of the small business community,” Zephyr said.
“There is an urgent need for a robust response to the needs of the small business community. Many owners of small and micro enterprises live from day to day and depend on their daily earnings to support their families,” Zephyr said.

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5 Comments

Mainlandweb.com says:

August 29, 2008 at 2:13 pm

The small and medium size businesses in Guyana do have a problem to secure financing, but there are several other major issues, some of which are as follows:
New Markets
Packaging
Burearacracy
Fluent English and Aggressive Attitudes
I would sick to these four for now. We know interest rates are duties are high, but I am assuming that products give a nice return to take care of this.
NEW MARKETS
Guyanese desperately have to fine new markets. The population is extremely small to produce real growth. Companies who are not exported oriented and depend on local market reaches their optimum point very early. They become stagnant and allow competitors to catch up, and before long there are equal competitors competing for the same market. Sales start to dwindle as overheads remain fixed. As manufacturers struggle to get ahead, quality declines.
PACKAGING
I have seen some products, such as casareep coming from Guyana that no other stores in Canada would carry, but the Chinese and West Indian stores. They have no tamper proof seals. Some boxes are made with the last quality of cardboards. They lack the glossy finish. A few Small spices manufactures type their labels and cut it manually with a scissors and stick it on. The ingredients are not listed nicely, and there is no quality control officer to verify that what goes into the products confirms to what is stated on the labels. The artwork is very poor. I bought noodles a lot of times and would discover that some noodles are sticking through the plastic bag. What about a nice box with a transparent plastic window.
BUREARACRACY
Briefly - Customs and Excise and various running around to get the necessary permits to export some commodities.
FLUENT ENGLISH AGGRESSIVE PERSONALITY.
Besides dressing nicely, Guyanese have a lot of improvements to do in the manner they speak when trying to woo foreign clients. Don’t be timid and stutter and stammer. Be confident in what you do. Show people that you know your stuff and that you are not merely asking them when you approach them. Try to look clean; shave, deodorize and so on. Imagine yourself bursting into a company and a few of the CEOs are standing by the Receptionist and they turn and ask you, “Sir, can I help you?’. Don’t be panic. CEOs are ordinary people. They may be good in their company affairs, but know not how to change a cell phone battery, or has a stinking fungus on his big toe, and need your help desperately.
Rgds,
Red Lion
http://www.gtrl.tv

Reply
african pearl says:

September 6, 2008 at 1:56 pm

Its very depressing for small business who trying to provide employment and can not move forward because they are not getting no space for instance look at the lumber industries you can not get a permit to work because you dont have a lease for your land which the president of guyana has not sign over 5 years and that is bad for business when you borrow a loans how are you going to repay your loan when you cant even get permission to work and nobody is looking into it.I wish the President could do some thing to help out this lease issue so that small business could be open and people could get work.
Thank You.

Reply
- Sonny says:
  
  September 7, 2008 at 10:40 pm
  
  African Pearl, I understand where you are coming from. You make me remember Mr. Muir from Lombard St when you talk about space.
  The President, huh. I do not think that the President understand clearly how the system he is in charge of really work, and what are the major problems Guyanese are faced with. Let’s be honest here, or maybe our President is not being properly advised.
  In 2001 I went to Japan and a bought a quantity of uses 1000 cc Suzuki Super Carry vans. Before I left for Japan the Customs Duties were app Guy$250,000.00, but upon my return - in a matter of a few weeks- the duties went up to Guy$850,000 per vehicle. Prior to my trip to Japan, they system was of such that a very small engine vehicle carries a very low Custom Duties. However, upon my return, it went up to $850,000.00 - a system of one high duty per unit of vehicle, matters not how small the engine was. I suspected that one of my major competitors might have used his influence. The Banks would not lend me more money, because my installments were falling behind. I followed the President around and confronted him one day at Patentia Housing Scheme, and raised the issue with him. Bharat Jagdeo told me that Guyanese are lucky because the duties in Malaysia are much higher. I went bankrupt. I suffered a lot as a result of that, but today I am very happy of what happened to me. I had no time to ask the President if he had an idea of the Standard of Living, the Cost of Living and the Income per Capita of Malaysians compared to Guyanese.
  Pearl, I know buddy. Business in Guyana is stress. Customs Officers and other Government Employees are just on the look out to “bleed you”. If you are not prepared to bribe and dance to their tunes, you are out. They look at every importer as some sort of enemy of the state. My nephew took a car there a few weeks ago and he had to pay close to 4 million Guyana Dollars in Duties and Taxes. He is not complaining because they are pouring their hard earned dollars into that crap-pot right now. I told them to talk to me in 3-4 years time.
  Rgds,
  Red Lion
  http://www.mainlandweb.com
  Mainlanweb : We Power the Caribbean
New Paradigm says:

September 8, 2008 at 7:27 am

mainlandweb “We know interest rates are duties are high, but I am assuming that products give a nice return to take care of this.’

This is a major problem. The bank does not want to run rish. There is no uniform approach. There are all kinds of hurdles. I wonder if these workers ever owned a busines and understand the real needs.

The banks are seriously conservative and thus does not act as a facilitator to the engine of growth.

They are siting on 30 billion dollar of social capital.

If the private sector is going to be the engine of growth then it has to get off its seat. So far I am not impressed. There is growth for themselves and the country but I am not seeing the reflection in a broader sense.

The bank is only concerned with more profits and the interests of the share holders. I would do the same and that is why a reliance on private capital alone to build a country, create jobs and facilitate development is definitely not the way to go.

I believe the leadership of the private sector should try to let the private sector appreciate not only their own individual interest but also the social aspect of the pact but I do not see this materialising.

The working people have to take note.

Reply
New Paradigm says:

September 8, 2008 at 7:33 am

All decisions has to be made or OKed by the President. An extreme form of centralism and that is why there is so much delay. The president does not take advise and if he does it is from his friends who have been placed in the meaningful positions and they are not necesarily teh ones who understand the situation or care.

Reply