-some wary of gov’t role in successor body
Linden entrepreneurs say they have been set back by the halt in Linden Economic Advancement Fund (LEAF) disbursements and there is also concern that the government’s lead role in the successor body will work against free enterprise.
Executive Secretary Wilfred Simmons, of the Linden Chamber of Industry, Commerce and Development (LCICD), believes that there should be a cap on the amount of monies the new entity will be provided for administration through the credit facility. “You gotta have a cap,” Simmons argued, “you can’t just have an unlimited feed from LEAF.” The replacement entity to manage LEAF, is expected to be named Demerara Enterprise Network (DEN).
This commerce executive says already the stoppage of the credit facility means no money is being offered in loans and the progress of small and medium-size businesses has come to a halt, with applicants to the credit facility having to put their applications on hold. LEAF client Rudolph Richards, of Triple L Bakery at Half Mile Wismar, told this newspaper last week that the community is under much pressure, because of high unemployment. As a result of these negative economic developments, Triple L’s sales are down 60% to 65%. Richards, had planned to apply to LEAF for a fourth loan to upgrade his business, but instead, he had to resort to using personal funds to stay afloat. He has cut back on production, but has not let go of any of the eight staffers. This newspaper understands that the staff was willing to renegotiate their salaries, since it was a case of receiving some salary rather than none at all. The bakery is hoping that the new school term will mean increased sales for snacks and by the end of September; sales will begin to rise again. And even as this baker is planning to increase production, he says that the availability of capital to do so is limited. Richards now says that he will be approaching LEAF to renegotiate his loan payments to ease the pressure. It is not clear if this is currently being done.
In addition, Simmons believes that the new entity which will replace the Linden Economic Advancement Programme (LEAP) and ultimately manage LEAF, a component of LEAP, should have been “up and running even before the original June 30 ending of LEAP and at least by July 31”. The staff and everybody associated with the entity should have been in place, he said. Simmons explained that the new entity is not like a new apartment, where they acquire the keys and move in, but would have needed to be familiarized with LEAP’s operation.
Region 10 Interim Management Chairman, Orin Gordon, said he believes the purpose of DEN should be to encourage enterprise, but if it is going to be government operated “it’s a backward step,” since LEAP came to encourage private sector and enterprise. The fact that the government decides who will go there (the make-up of the DEN board of directors) is a backward step, was his view. Those two things cannot work, said Gordon, speaking of the government’s role as private sector and regulator. “Stay at the back,” he reiterated, and play a promotional role, were his views on what role the government should play in DEN. His concern was that people tended to work less aggressively when the government is in control and the possibility of success would be affected.
One option that was on the table, according to Gordon was for the private sector to buy shares in the new entity, and as DEN grows, it becomes more appealing to the private sector, making them more open to buying shares. The registered Linden Community Development Association (LCDA), Gordon says could have adequately taken over from LEAP since it had the infrastructure in place. Under the LCDA management are several properties in Old Kara Kara and central Mackenzie, given to the association to manage, by the bauxite mining company Alcan, during the glory days of bauxite. It is his view that DEN would not have had to be invented.
International Project Manager of LEAP Kathleen Whalen, told this newspaper recently that DEN is not registered as yet, but said that they were preparing all documentation and putting procedures in place to have it registered. Only when this new body is registered it will be able to manage the Fund, which has given no loans for six months now. According to her, LEAP has recommended some names to be on the six-member DEN board, and these recommendations along with a draft of how DEN is expected to operate are with the Cabinet.
Whalen explained during the interview, that the decision by the government to transfer the credit fund to DEN and have it remain in Linden to promote small business development “is more than we had counted on.” She noted that, it was believed that the credit programme would go toward the whole country; referring to the decision as, “that’s big…that’s a real big statement.”
In relation to the Board, she says that it will certainly be composed of people with relevant experience and it is expected to include persons from the Chambers of Commerce in Region 10, the manufacturers’ association, Go-Invest and since its assets belong to the government, representation from other relevant agencies. Since March 31, no loan was given out under LEAF, and Whalen said that she is ‘really anxious to get this back on line’.
The credit programme is expected to be smaller, “and will be built up slowly,” noted Whalen, who had admitted that a part of DEN’s operating income will come from the management of the credit facility.