Small Business Bureau to be set up this month

An informed source has told this newspaper that the bureau, which will serve as the secretariat for the implementation of the provisions of the Act  is expected to be in place later this month and that in the first instance it is likely to be staffed by four of the seven functionaries for which provision is made under the Act. A Chief Executive Officer is also likely to be named shortly.

The establishment of the Small Business Bureau is expected move the country closer to giving full effect to the provisions of legislation enacted more than six years ago that seeks to establish a structured incentive regime and support programme for small business in Guyana including the creation of a Small Business Development Fund. Critically, the creation of the Bureau is expected to give greater clarity to government’s position and policies relating to the strengthening of the small business sector, deficiencies which, up until now, are widely believed to have inhibited the growth of small business in Guyana.

The Small Business Bureau is one of two administrative tiers identified in the legislation, the other being an 11-member Small Business Council which is already in place and which comprises a representative of the Ministry of Tourism, Commerce and Industry, a representative of the Ministry of Finance, four representatives of organizations representing small business in Guyana, one person representing a financial institution other than a commercial bank, one person from the organization representing bankers and two other persons from “other business disciplines.”

Under the Small Business Act the Bureau, which will function under the supervision of the council, is also charged with several additional key responsibilities including the coordination of programmes for small business development, with funding provided by government and other agencies and preparing the draft annual report on small business in Guyana for the approval of the council. Critically, the annual Small Business Report is expected to allow for an assessment of initiatives undertaken by government to facilitate small business access to financing, and will also enable the gauging of the level of government procurement from local small businesses. In its reporting to the council the bureau is also expected to recommend fiscal incentives for small business development as well as to provide relevant statistics relating to activity in the small business sector.

The disclosure regarding the imminent establishment of the Small Business Bureau coincides with a heightened level of public and private sector discourse over the need to provide funding for the acceleration of the small business sector, including the key manufacturing and agricultural sectors and the institution of measures designed to support small business development through support in the areas of marketing, product preparation and business development training.

Among the functions of the 11-member council are reporting to the Minister of Tourism, Industry and Commerce, the designated minister responsible for the Small Business Sector on progress made in addressing development issues and streamlining administrative pro-cesses relating to small businesses.

With the establishment of the Small Business Bureau attention is likely to shift to the speed with which government honours its obligation under the Act to establish a Small Business Develop-ment Fund designed to provide access to financing for small business; offer non-financial support to help small businesses improve their productivity and competitiveness; facilitate institutional support for organizations representing small business and funding the expenses of the Council and the Bureau.

With the disclosure of the imminent establishment of the bureau government will be expected to significantly increase its subvention to the Small Business Council from the $15 million allocated for 2010, given what will shortly be the Council’s responsibility for funding the salaries and work programmes of the members of the bureau. Last year, government allocated the Council $1.5 million.

Resources for the creation of the Small Business Development Fund are expected to comprise allocations made by the National Assembly, funds made available by government including loans negotiated for small business development, grants made to the fund, and monies accruing from investments made by the fund, and services provided by the Fund.

Under the provisions of the act, the subject minister, “after consultation with the council and the minister responsible for finance” will determine “the policies to be carried out by the fund and the procedures to be established or instituted for effectively managing the resources of the Fund.”

The Small Business Act sets out specific criteria for a business operation to be deemed a small business requiring that such businesses meet two of three criteria viz. providing employment for not more than 25 persons; has gross annual revenues of not more than $60 million and has total business assets of not more than $20 million. The act also empowers the subject minister to designate a small business an “approved small business” subject to “an application therefore to the Small Business Council.”