Guyana’s 2012 budget proposals have outlined plans for supporting the development of the country’s small business sector through the Small Business Bureau established under the 2005 Small Business Act.
In his budget presentation on Friday, March 30, Finance Minister Dr Ashni Singh announced that the administration proposes to invest US$10 million in financing the growth of small and medium sized enterprises (SMEs).
Singh told the National Assembly that the funding seeks to address two “major bottlenecks” that constrain the development of SMEs namely limited access to finance and limited technical and business skills. Local small business organisations are likely to welcome the announcement by the Finance Minister which appears to signal the government’s preparedness to provide significant financing for the actualization of the provisions of the Small Business Act eight years after it was passed into law in March 2004.
The Act made provision for the establishment of a Small Business Council, a Small Business Bureau and the establishment of a Development Fund to help provide access to finance for small business development as well as non-financial services aimed at helping small businesses improve productivity and competitiveness. Additionally, the Development Fund will provide institutional support for organisations representing, promoting, supporting and strengthening small businesses and financing the work of the Small Business Bureau. Singh said that of the US$10 million earmarked for the small business sector, $1.7 million is budgeted for financing the Small Business Development Fund. This fund will provide for a collateral guarantee scheme, an interest payment support facility, and a grant scheme to assist SMEs and vulnerable persons with viable business propositions to implement their business endeavours,” Singh said. The primary significance of the fund reposes in easing the frustrations of small business owners and potential owners whose inability to meet the conditionalities for commercial bank lending have stymied the growth of their businesses.
Proposals for small business development contained in the 2012 budget also include the creation of a skills voucher scheme which, according to the Finance Minister, will be launched “to support the development of technical and business skills for 500 SMEs and vulnerable persons” in 2012. Under the provisions of the fund over 800 jobs are expected to be created while 300 SMEs and vulnerable persons will have access to loans while 100 grants will be available for eligible persons.
Subject to the passage of the 2012 budget in the National Assembly the Small Business Council is expected to become fully operational in pursuit of its functions which include the preparation of a small business policy and administrative reform agenda, the maintenance of a small business register and the preparation of an annual budget and small business procurement programmes.
The Small Business Bureau will function under the supervision of the council and will be responsible for promoting developmental issues relating to small businesses, coordinating programmes for small business development and monitoring the effective implementation of the Small Business Act. The bureau is also assigned to develop the capacity of small businesses by raising awareness and providing education and training.
In his budget presentation the Finance Minister said that SMEs serve to contribute to creating productive employment and generating incomes in such areas as agriculture, agro-processing, arts and craft, entertainment, and artisanry. He said that last year the Small Business Bureau adopted a cluster approach to working with small businesses, particularly with members of the Guyana Arts and Craft Producers Association (GACPA) and the Guyana Agro Processors Association.