Ask most small and micro businesses in Guyana what most threatens their capacity to grow and they will probably tell you something about the indifference of both the major local lending institutions and the private sector umbrella organizations to their concerns.
Whenever a small business forum is held in Guyana, the issue of just how responsive commercial banks have been to the financing needs of small and micro entities never fails to arise. The emerging businesses have been bemoaning the fact that the lending institutions ask for collateral which they simply do not have and that the umbrella organizations sit cloistered in their ivory towers oblivious to the concerns of struggling businesses.
Neither the banks nor the umbrella business organizations have been impervious to these criticisms. Having, for years, endured the criticism that it remains indifferent to small and micro enterprise concerns, commercial banks are now literally tripping over themselves to unveil lending packages that seek to circumvent the traditional requirements.
There has been less movement on the part of the private sector though a few weeks ago the Georgetown Chamber of Commerce and Industry (GCCI) announced that after more than a century of restricting membership to what one might call established businesses it has decided to open its membership to fledgling business houses. Last week, at its most recent business luncheon, the hall resonated with assertions that the Guyana Manufacturing and Services Association (GMSA) has led the effort to help small business owners build capacity and strengthen their abilities to produce products using local and imported raw materials, while meeting the standards required by international buyers. The GMSA has also been talking about its role in sourcing overseas markets for a number of products including pre-fabricated wooden houses, exterior furnishing, processed foods and condiments and interior decorations made of wood, leather, straw and various grasses. The constraints, however, are never far away, and, increasingly, both small and micro business owners and banking and other institutions are beginning to recognize that the problems of growth in the small business sector are unlikely to be solved through benevolence.
Marketing, for example, is one of the major headaches of the micro and small business sectors. Marketing depends on special events – like GuyExpo, for example — overseas trade fairs and visitor arrivals. All of these require significant monetary investments though none of them provide assurances of any meaningful material rewards.
The GMSA has, over the past two years, sought to source skills and technology from overseas to help build capacity in the manufacturing sub-sector of the micro and small business sector. The organization has utilized a number of avenues including foreign trade fairs, and engagements with funding agencies like the Barbados-based Caribbean Export Development Agency (Caribbean Export) and the Canadian International Development Agency (CIDA) to help respond to the problems of micro and small businesses.
Apart from the role it has played in strengthening commercial ties with China the GMSA says it has identified significant opportunities for new markets in Brazil against the backdrop of the 2011 Economic Integration Project signed with SEBRAE, the Brazilian organization which has been providing guidance and support for the development of small business organizations in northern Brazil.
Even with the best will in the world, however, most micro and small businesses in Guyana must fight their own battles. For reasons that have to do with both a lack of cohesion and a lack of capable leadership, small and micro-businesses in Guyana have failed to develop and sustain an effective umbrella organization. In effect, their fragmented nature has been their Achilles Heel.
No less significant has been the difficulty that has arisen out of the need to separate grand gestures from practical action. This year alone the GMSA hosted diplomats from Russia, Caricom and India to speak to private sector audiences on the issue of providing expertise to help boost the growth of the country’s small enterprise, technology and entrepreneurial sectors. Little in practice has emerged from these initiatives.
Small and micro business operators have exercised little if any faith in the likelihood that the umbrella business organizations and, by extension, the smaller businesses themselves, will use their economic clout to pull them up by their bootstraps. “You have to bear in mind that these umbrella business organizations have grown used to operating like separate entities for years. They are not about to reach out to us now,” a small business operator in the food preserving sector told this newspaper recently.
GCCI President Clinton Urling, however, begs to differ. “The fact is that there is only one private sector in Guyana and if the chamber can take initiatives that can help to strengthen the private sector as a whole then that is something entirely worthwhile to do,” Urling says.
Beyond the support which the micro and small businesses might anticipate from the bigger players in the private sector there has also been much public discourse on the role government can play in strengthening small businesses. Up until now and beyond the political pronouncements that have been made about the role which small businesses have to play in the country’s economy, government itself has done little in practical terms to support the small business sector, though it is obvious that its lobbying has contributed to some of the initiatives taken by the commercial banks. While, at least in theory, more support official could be forthcoming for small and micro businesses under the provisions of the 2004 Small Business Act, the fact that these provisions are yet to fructify after more than 12 years has given rise to cynicism among would-be beneficiaries. What they also fear is what they say will be the inevitable bureaucracy that will arise out of what they will doubtless regard as government handouts. Similar red tape could affect the accessing of bilateral credit for small business development.
We are told, for example, that eventually, Guyana will be able to access a $50 million Indian Line of Credit with which to support small business development. The question, however, is when, since, as the newly accredited Indian High Commissioner has pointed out Guyana will have to utilize current credit lines before talks begin on securing that new credit tranche.
There are likely opportunities for business collaboration between local small and micro enterprises and larger expatriate companies. Some Indian companies have reportedly expressed an interest in joint venture initiatives in mining and agriculture to add to an estimated US$30 million in investments in the country over the past year. Such initiatives are known to take ‘forever’ to fructify, however, in much the same way, the previous promises of regional investment collaboration with local small businesses have failed to materialize.
