The emergence of the SME Caribbean Toolkit which, according to Republic Bank’s full page advertisement in the local newspapers can be used “to start, strengthen or expand” existing businesses provides the most recent indication that local commercial banks are beginning to pay more serious attention to the needs of growing businesses.
In this particular instance Republic Bank is partnering with the International Finance Corporation (IFC) which is part of the family of World Bank lending agencies to support the growth of small and medium-sized businesses in the region.
In principle it is a good sign, particularly in a region where the posture of financial institutions towards lending to SME’s has not exactly been forthcoming and where some of the various other support services associated with the creation of an enabling business infrastructure have been virtually non-existent here in Guyana and in some other parts of the region.
The “tools for success” identified in the Republic Bank advertisement indicate that among other things, the SME toolkit seeks to bring a greater measure of technological savvy to the administration of small businesses in the Caribbean. If this is indeed part of the intention of the ‘Toolkit’ it bespeaks a recognition that in today’s IT-driven international community there is really no need for small and medium-sized businesses to seek to reinvent the wheel as far as the growth and development of an enterprise is concerned. Indeed, as the Republic Bank advertisement points out the ‘toolkit’ includes “free business software” and various forms of on-line support which, among other things, can save both cost and time by providing ‘coaching’ in the various essential elements of managing and growing a business. Also numbered among the various other “resources” to help budding entrepreneurs are mechanisms to help in the management of finance one of the hurdles at which many small and medium-sized enterprises have fallen.
One of the things which I hope the “toolkit” will accomplish is the removal of what has been the traditional barrier between the small entrepreneur and the conventional sources of financing including the commercial banking sector. Significantly, Republic Bank, in this instance, is acting in concert with the most influential multilateral lending institution in the world, a clear sign that globally, the growth and development of small and medium-sized businesses is regarded as a critical element in the development of the economies of poor countries.
One of the reasons why I like the idea of a collaborative effort between the World Bank and the commercial banking sector is because it removes – hopefully – the frustrating red tape that characterizes accessing of multilateral funding and other resources in cases where governments have a say. Additionally, as the MFI’s have conceded from time to time the prevalence of corrupt state officials has meant that governments have not exactly covered themselves in glory as far as the administration of multilateral financing is concerned.
What the SME Toolkit also promises to do is to wean regional small and medium-sized entities onto a gradual IT-driven diet of business practices. I have argued in the past that here is Guyana, for example, there are people who run businesses who are not necessarily businessmen and women and if this may seem like a contradiction in terms one only has to look at a number of various local enterprises that appear to do pretty well just above a subsistence level but which are unlikely to grow any further purely because those who run them simply lack to know-how that would enable their growth and expansion.
In this context I believe that one of the potentially positive things about the SME Toolkit is that it could break with what has been a traditional aversion to the resources available through the medium of IT. What this would obviously mean is that small and medium entrepreneurs seeking to engage the banking system on the SME toolkit and the various other ‘packages’ available in the commercial banking sector for small and medium-sized businesses will – more likely than not – seek to become more IT-savvy, opening up an expanded demand for that type of training.
All of this, of course, coincides with the announcement by the Arthur Loc Jack School of Business at the University of the West Indies that it will be launching its curriculum on location in Guyana as of May this year which curriculum includes an executive MBA that will target employees of local businesses. This in effect means that we would have been seeking to create greater numbers of business-savvy people at a time when those skills will be needed to facilitate the strengthening of the links between the banking system and small and medium-sized entrepreneurs through the SME Toolkit.
On an ‘aside’ IT caught my eye last week that as part of its curriculum the Arthur Loc Jack School will be providing participants in its courses with tuition in Portuguese and will also be using two professors from Brazil in its Business Studies programme. I consider this the kind of positive thinking that arises out of the Business School’s awareness of key elements of the relationship between Guyana and Brazil. It is the kind of thinking that renders the School relevant to Guyana and it is, to say the least, an excellent marketing strategy.
While it is now anybody’s guess as to when the spin-off from the Takatu Bridge in terms of cross-border trade will begin to materialize it is more than a trifle discomfiting that now that the hullabaloo over the opening of the bridge has past and gone we have been told nothing more by the authorities about a long-term plan to take full advantage of the new physical link between the two countries. Over the years – and you can take my word on this – it has become altogether commonplace for agreements to be reached with our neighbors in the hemisphere – including Brazil and Venezuela – that have not been activated because of a lack of capacity on our side. We cannot afford to allow the promised momentum of a accelerated level of cooperation between Guyana and Brazil to fade away.
To return to the business of the SME Toolkit we need to give it time to work though one must hope, first, that the procedures associated with benefiting from what it has to offer are not sufficiently daunting to deter small business operators. After all, who can deny that over the years small businesses in Guyana have developed a healthy suspicion about the commercial banking sector ………….sometimes, frankly, with good reason. The other point that I should make here is the people who run small and medium-sized businesses must seek to find out what the Tooklit has inside for them. Of course, it is Republic Bank’s job to make that information accessible.
