The recent publication of the 2012 Report of the Institute of Private Enterprise Development (IPED) throws a further positive spotlight on a local small business sector which, in recent months, has already been illuminated by two important recent developments; first, there was the announcement by the Georgetown Chamber of Commerce and Industry (GCCI) that it was opening a membership window to small businesses which, hitherto, could not become members of the Chamber. The second important development was the recent announcement of the imminent launch of the US$5 million small business development project to be executed by the Small Business Bureau with funds from the US$250 million made available by Norway in exchange for environmental protection commitments.
Both initiatives have come at a welcome time for the small business sector, the former providing modest and in many cases struggling business ventures with a measure of ‘cover’ in the form of the kinds of professional guidance and advice not previously available to them. The second initiative elaborately titled the “low-carbon alternative livelihoods for vulnerable groups in Guyana” is much more eye-catching in its orientation insofar as it offers various forms of material and technical support for small and micro businesses which, up until now, they have had difficulty in accessing elsewhere.
In previous articles on this project we have alluded to the various loan, grant, loan support and business training opportunities which this project purports to offer. We have also pointed to the fact that around 2,000 small businesses have already ‘registered’ with the Bureau in the hope of taking advantage of the financing and other benefits which the project has to offer. What has been discussed rather more sparingly up until now is the role which the project can play in helping small businesses to put their houses in order through compliance with national laws and regulations associated with the orthodox running of business enterprises.
The Small Business Bureau has already said that its criteria for responding positively to entities seeking its support will focus not only on the viability or otherwise of the proposals that are put before it but also on the compliance by those entities with laws governing formal registration as a business entity and other requirements including, crucially, compliance with laws pertaining to honouring commitments to the National Insurance Scheme and the Guyana Revenue Authority. We raise this issue since we are aware that there are a number of small ‘business enterprises’ across Guyana which, in all likelihood, might wish to benefit from the soon to be launched small business project but whose status might render them ineligible for qualification. Indeed, we go as far as saying that there are in some cases that we know of, unregistered, non-compliant enterprises that have benefited from grants and other forms of support through funding from external agencies administered by government agencies. Not, of course, that we would want to deny those entities the support that they receive, but we believe that the criteria of getting themselves in order – so to speak – should be insisted upon if they are to be beneficiaries from projects such as the one under review here.
We share the view which is likely to be articulated elsewhere that many micro businesses in Guyana actually begin as modest, ‘bottom house’ ventures which actually begin as short-term income subsidies but which, in many instances seek to transform themselves into orthodox business ventures without the benefit of formally registering as businesses or, in the cases of the investors, even a shred of business training. Frankly, that is really no excuse since it has to be said that in recent times the GCCI has excelled in offering free and high-quality business training seminars, which it has been actively encouraging small business owners to attend. These training exercises have certainly been providing small businesses with opportunities to raise their game by regularising themselves. What may be proffered by small operators for non-compliance, however, is what is widely believed to be the various tax and NIS evasion schemes by bigger players in the businesses community in circumstances where the indifference of the authorities to bringing these practices to an end have been readily apparent.
The good thing about the project titled the “low-carbon alternative livelihoods for vulnerable groups in Guyana” is that it offers small and micro businesses more than sufficient incentive to comply with national laws and regulations, which compliance will go a far way towards putting an important sector of the economy in order. Of particular importance is the role that the project can play in helping small businesses to improve their relationships with commercial banks since, while it seeks, among other things, to make bank lending more accessible to the small business community, commercial banks will certainly be insisting on those fundamental compliance criteria like business registration if they are to do business with the borrowing entities.
In sum, the Small Business Bureau, the executing agency for the project has a lot of work to do in terms of – on the one hand – insisting that enterprises seeking the support of the project acquire the necessary compliances and, on the other (and this is particularly important) not building the kinds of bureaucratic walls around itself that would quickly create howls of protest from small business entities that are likely to conclude that they are deliberately being shut out of the process.
