High-performing small enterprises can get business boost from Bureau

A Small Business Bureau training session in Region Nine. Inset is the Bureau’s CEO Dr. Lowell Porter.

Local medium and small enterprises (MSE’s) registered with the Small Business Bureau (SBB) and which have “implemented solid standards” in the quality of their products and services and demonstrated service delivery excellence could find themselves listed by the Bureau as having qualified to be recommended to larger companies seeking to contract or sub-contract smaller companies to provide products and services.

 The disclosure, made in a lengthy internal assessment of the eight-year-old state entity established under the 2004 Small Business Act and due to be published in The Guyana Review later this month says that qualifying small businesses will benefit from advertisements executed by the Bureau on behalf of those companies “to promote their services to the large enterprises.” These large companies   will then engage the Bureau in instances when a business opportunity that is consistent with the capabilities of SME arises. The large company offering a contract opportunity would have the opportunity to contact one or more of the SME’s recommended by the Bureau in order to secure proposals relating to the execution of the particular job, the disclosure from the SBB says of an initiative which, according to the article “involves lot of business research in our database and in the field” and which it expects can significantly support the growth of small businesses in Guyana.

The disclosure of what is, in effect, a new role for the SBB points to government’s intention to enhance the clout of the Bureau in pursuit of small business growth against the backdrop of the view espoused by its critics that its performance has fallen below expectations since its substantive commencement of operations in 2013.

From 2014 to the end of July 31 this year a total of 192 bank loans were approved in the amount of G$803.5 million while 189 loans totaling G$677.6 million were disbursed. The Bureau says that these funding opportunities contributed to the creation of 487 jobs. At the same time it points out that delinquency has been minimized, a circumstance which, it says, “attests to SBB’s initial screening……… further supported by the banks’ due diligence.” To date, the total value of claims is US$6,700, the equivalent of 0.43% of the total guarantee fund of US$1.575 million.

For the same period 574 Low carbon grants accessed directly from the Bureau totaling $177.45 million were approved with 544 in the amount of $162.2 million disbursed. Arising out of this facility 900 jobs were created.

With most local commercial banks having long come under strident criticism from the small business sector for what is widely believed to be their stringent lending policies, the Bureau’s Chief Executive Officer says that there may have been some measure of change in recent times. “While the banks have begun to demonstrate some amount of flexibility for the smaller loan amounts, with respect to collateral required for the remaining 60% cover (loans up to USD$1,500), small businesses still find it generally difficult to secure more significant loan requests.” However, the seeming shift in banks’ position, the article says, will be difficult to measure since the MSED programme comes to an end at the end of October and “will not allow for sufficient time to test an increased guarantee limit that increased loan uptake can be possible.”

Meanwhile, the article disclosed plans by the Bureau to initiate a planned “Business and Technical Training” initiative which will focus on six programmes aimed at developing sustainable entrepreneurial enterprises and will include loans from the Small Business Development Fund that will specifically target former sugar industry workers as well as other vulnerable groups in Regions Three, Four, Five and Six and elsewhere.

Meanwhile, the Bureau’s ‘performance report’ concedes that “limitations relating to access to finance to further the growth of local micro and small enterprises” continues to be an issue impacting the effectiveness of eight-year-old SBB, though it says that that limitation has not prevented the institution from making inroads in terms of the accomplishment of its major goals.

Overwhelming demand

In response to this shortcoming and based on what it says is “overwhelming demand” for small business expansion the Bureau says that it will “continue to implement programmes which will address both funding and capacity issues faced by MSEs in their quest for growth.” Funding apart the Bureau says that in the period ahead its Business and Technical Training initiative will roll out specific programmes and initiatives tailored to develop sustainable enterprises. The document names increased exports, the full and effective implementation of the 20% government procurement allocation for small businesses, the initiation of a Green Fund Programme, a Youth Development Initiative, and the channeling of loans from the Small Business Development Fund (SBDF) to job-creation initiatives that respond to the needs of each region 

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