The materialization of a report that allows some insights into the performance of the much vaunted Small Business Bureau in terms of its role in kick-starting a transformation in the small business sector finally allows us the opportunity to evaluate what it has accomplished so far, what some of its failings are and what sorts of adjustments/corrective measures it might take.
What the Bureau was set up to offer is an opportunity for medium-sized and growing businesses to benefit from credit guarantees which it offered, circumventing the collateral requirement which, up until now, has stood as a formidable barrier between the commercial banking system and potential borrowers whose capacity to meet collateral requirements fell below the banks’ borrowing requirements. The whole idea behind the Bureau’s credit guarantee scheme was to get the local commercial banks to throw their collective weight behind the growth of the small business sector by stepping up to the plate. Only two, the Guyana Bank for Trade and Industry and Republic Bank (Guyana) Limited have so far bought in to the programme though we are told that Scotia’s principals in Canada had been considering its participation.
After more than three years in place there appears to be no definitive yardstick with which to measure the overall accomplishments of the Bureau’s efforts. The Bureau tags at around 60% the success rate of its grant-funded projects but then it makes two interesting points, the first being that the success rate refers only to those projects that it has been able to review so far (grant-funded projects are scattered across the country); It makes the further point that even those grant-funded projects that can make a case for sustainability are not particularly employment-generating, which of course is the whole idea behind the project.
Here, it is the current Chief Executive Officer of the Bureau, Dr. Lowell Porter who himself wonders about the viability of the model, making the point, first, that trying to kick-start a serious micro or small business with a grant of $300,000 is a ‘big ask.’ Dr. Porter goes further, wondering whether, in the first place, an expectation that those businesses would yield 2200 jobs was reasonable.
There is, too, the issue as to whether the training regime that attended the programme, in which a large number of trainers were recruited reportedly without (in some cases) being properly evaluated for suitability worked as it was intended and while the report avoids any critical comment in this regard we now know that the Bureau will be focusing to a far greater degree on internal training in the future.
With project funding for this phase of the programme having been exhausted, the SBB Chief Executive Officer believes that the entity has made a case for its sustainability though he sees likely funding challenges ahead. In this regard he believes, he says, that it is important that government makes a long-term commitment to the financial support of the agency since one of its first challenges would be funding the continuity of the handful of specialists without whom the Bureau would be considerably weakened.
A consideration worth pondering is what, until now, has been the low level of commercial bank response to the programme. Some banks may argue that they have been developing their own programmes for the private sector though it would do much for the confidence of the Bureau if its initiative were to be embraced by the commercial banking community as a whole.
