Urban small business operators will have an opportunity to interface with commercial banks and other lending institutions at a September 30 forum organized by EMPRETEC (Guyana) to discuss issues relating to access to capital for small and medium-sized business investment.
The forum, which is expected to bring together at least two local commercial banks, a prominent small business lending institution and small businesses from various sectors will discuss issues relating to the creation of an enabling environment that allows for greater access by small business operators to loans from commercial banks and other institutions.
Local small business operators have repeatedly expressed frustration over what they say are the formidable conditionalities set by lending institutions for accessing financing, which they are unable to meet. But EMPRETEC Managing Director Judy Semple-Joseph told Stabroek Business that in her own engagement with the local commercial banks she had not found them unresponsive to the concerns of the small business sector. “Commercial banks have rules, regulations and procedures and you cannot qualify for lending by commercial banks as long as you do not meet those conditionalities,” Semple-Joseph said.
According to the EMPRETEC Managing Director many small business operators do not trouble themselves to seek to determine what the “procedures and conditions” associated with engaging a bank are. “The fact is that if you approach a bank unprepared it is very unlikely that the bank will take you seriously and I am advised that in a great many cases people are not prepared. They do not take the time to find out what the banks are looking for nor do they trouble themselves to check with the agencies that can help them,” Semple-Joseph said.
“We have had lots of informal discourses with people in the financial sector and in a lot of cases the banks have given us examples of cases where lending approaches are flawed. In other cases too some people have simply not presented themselves properly and have not been able to gain the confidence of the lending institutions,” she added.
Semple-Joseph said that at the September 30 forum, EMPRETEC will be seeking to serve as “an intermediary” between small businesses and lending institutions, “trying to teach them how to prepare for engaging lending institutions.” She said she was aware of the concerns being expressed regarding limited access to funding for small businesses. “I am not sure where the problem is and that is part of the reason for the forum. We hope to use the forum to find out where the real issues are and whether those issues have to do with the banks or with the small business owners themselves.”
Semple-Joseph said that EMPRETEC had decided to convene the forum given its awareness of the concerns being raised by small business owners and potential owners who she had engaged. “One of the complaints that we get is that all of the training and orientation really leads nowhere if at the end the day we cannot secure funding,” Semple-Joseph told Stabroek Business.
The EMPRETEC official told Stabroek Business that she believed part of the problem in the communication between lending agencies and small business owners was “a confidence issue.” She said that part of the purpose of the forum was to familiarize participants with the culture of lending agencies and to equip them to respond to that culture.
