The essence of the argument made by one of our regular columnists in today’s issue is that the merits of Scotia Bank’s recently launched Small Business Banking (SBB) initiative, notwithstanding, the criteria that distinguishes ‘small’ from ‘micro’ businesses essentially means that the window the bank has opened is still far too small to accommodate the entrepreneurial ambitions that continue to mushroom all across the country.
The problem, the central problem, is that most of these ambitions are driven either by the need to earn or the need to earn more and, in far too many cases, are really not buttressed by any real entrepreneurial know-how that takes account of issues like cash management and other aspects of business organization including considerations of marketing which are necessary firstly, to enable sustainable growth, and secondly, to qualify them for the kinds of business support opportunities like those Scotia is now offering under its SBB programme.
What this means, of course is that a careful analysis of the thousands of enterprises across the country which we loosely categorize as small businesses are not in fact what they are touted to be since they manifestly do not meet the aforementioned criteria. A good example of this is to be seen among the membership of the organisation known as the Guyana Small Business Association (GSBA) most, perhaps all of which, are actually struggling and, in some cases, failing micro enterprises. They struggle and fail because many of them were not created along orthodox business lines in the first place and even those that might have been originally envisaged as properly organized businesses lack both the human or material capital with which to sustain themselves.
All this, of course, raises a number of issues the first of which is the looseness with which we use the term ‘small business’ without really seeking to determine whether, by whatever criteria we set, those enterprises qualify to so describe themselves. But that, in a sense, is really the least of the problems. The real problem lies in the establishment of a clear set of criteria for what are ‘micro’ ‘small,’ ‘medium’ and ‘large’ scale businesses and creating mechanisms that allow for some measure of ‘graduation’ from one ‘scale’ to another.
Setting aside issues of size and scale the distinguishing features between what constitutes ‘micro’ and what constitutes ‘small’ appears to repose in levels of organisation and planning, a point which our columnist also makes in her article; and once we arrive at this point we are bound to discover that what we have is a failure on our part to provide an enabling environment to facilitate that ‘graduation’ from one stage to another.
Interestingly, there are several long-standing businesses in the agricultural and service sectors that have actually been able to persist for years and even to show some measure of financial profit without any kind of strict adherence to the orthodoxies of entrepreneurship. The problem with even these kinds of businesses, however successful they may have been, is that their operational practices disqualify them from any kind of meaningful access to the mainstream financial system through mechanisms like Scotia’s SBB. This, of course, is understandable and not at all a bad thing since it compels those kinds of enterprises to become more organisationally effective.
It is here, of course, that the government must shoulder much of the responsibility since it accepts, explicitly and, one assumes, implicitly, that small business accounts for a sufficiently high level of employment and income generation to be taken seriously We have commented before on the failure by the government over several years to activate the provisions of the Small Business Act and in the wake of Scotia’s SBB announcement we do so again. Additionally, we believe that initiatives to provide training for potential entrepreneurs and even current owners of business enterprises who have no entrepreneurial training whatsoever has to go way beyond the efforts of institutions like the Institute of Private Enterprise Development (IPED). Government has to shoulder much more of that type of responsibility.
