– funding to come from GRIF
Government will shortly roll out a new US$10 million financial support programme for small enterprises through the Small Business Bureau (SBB), Chief Executive Officer of the bureau’s Secretariat Deryck Cummings says.
The disclosure that government spending under what is known as the Micro and Small Enterprise (MSE) Development and Building Alternative Livelihoods for Vulnerable Groups could begin shortly is contained in a letter from Cummings in response to an article in this newspaper, in which some small business operators complained of official neglect of the sector.
In his letter, Cummings says the Government of Guyana recognizes the role small businesses have to play in the local economy and “is seeking to further foster their development by facilitating easier access to much needed finance as well as technical and managerial skills.” He concedes that funding and training are “two of the major constraints” to the survival of local small businesses.
The US$10 million state support facility was announced earlier this year, though up until now government has said little about how the funds will be either administered or dispersed by the Small Business Bureau. Some small business owners have complained for several years about official sloth in kick-starting the much needed funding project which, according to Cummings, is being financed under the Guyana REDD+ Investment Fund (GRIF) a multi-contributor trust fund for the financing of activities identified under the Government of Guyana’s Low Carbon Development Strategy (LCDS).
Cummings says the project for micro and small business development to be administered by the SBB seeks to address the constraints of finance and training, “by offering innovative financial products as well as business development services, in partnership with reputable financial and training institutions.”
According to Cummings, the SBB is a semi-autonomous body situated within the Ministry of Tourism, Industry and Commerce and which has responsibility for the promotion of developmental issues relating to of small businesses in Guyana, the coordination of programmes for small business development and monitoring the implementation of the Small Business Act of 2004.
In his letter Cummings says that since the enactment of the legislation, the SBB has been actively supporting small business development in Guyana and continues to do so “through the creation of market linkages, via facilitating attendance of small business persons at both local and overseas trade fairs.” The SBB, he says, has been subsidizing freight costs for such overseas visits, developing and maintaining a database of local small businesses, encouraging government procurement from small businesses by taking the lead in this regard, coordinating training and other developmental programmes based on what he describes as “needs assessed”.
According to Cummings, the bureau is now positioned to fulfil its mandate with respect to ‘access to finance’ through the small business development fund initiated with the implementation of the GRIF-funded project for micro and small business development.
The GRIF-funded project, according to Cummings, will allow for adequate risk-sharing between the government and other financial institutions, particularly banks, which are already involved in lending to the small business sector. A collateral guarantee product for example, will see SBB guaranteeing up to a maximum of 40% of the amount to be loaned to beneficiaries.” This, according to Cummings, will allow financial institutions to now include in their portfolio, clients who would have ordinarily been turned away or offered a reduced loan amount based on the collateral available. “Another product, the interest subsidy, will allow the beneficiaries to access reduced interest rates, with the subsidized amount being paid to the lending institution,” Cummings says.
Meanwhile, Cummings says the project will also address the constraint of a lack of business management skills in micro and small business enterprises by partnering with reputable training consultants to provide training at no cost to the beneficiaries.
SBB’s collaboration with the financial and training institutions, according to Cummings is also expected to enhance its efforts to increase “job creation in low carbon sectors.”
