There is underway in Guyana, an unforeseen revolution in the creation, and growth of small business. This movement of business creation is creating employment and livelihoods beyond, which may not be properly accounted for by our national accounts, and employment data. The current government has created a relatively good business environment, with a wide playfield open to all, for the new business creation.
The aura of optimism over the last few years can be seen in a record number of business registrations, beyond the hopes of the oil bonanza. There is additional scope for the Government of Guyana, to assist in scaling the small business sector (used here in a generic way to include micro enterprise), thus further amplifying its developmental effects.
There have been push and pull factors for this new revolution of business creation, and the amazing thing is women entrepreneurs are taking a significant lead, showing a boldness not ever seen in Guyana. This is an obvious result of the fact that the business environment in general is more friendly, encouraging, safer and optimistic. The relatively large number of women in the small business sector mirrors what is happening in Latin America and shows that Guyana is apace with the regional trend.
A study, sponsored by Babson College (USA), Universidad del Desarrollo (Chile) and the University Tun Abdul Razak (Malaysia), provides insights about the entrepreneurial activity of women worldwide. Latin America has a high percentage of non-entrepreneurs (65 percent of males and 50 percent of females) that intend to start an entrepreneurial venture within the next three years. The Babson College report also notes that there are positive attitudes of women entrepreneurs to entrepreneurship in the region.
A large number of small businesses have mushroomed, gained visibility, and made their mark in Guyana in the last few years, owned and led by both males and females, in the agro-processing, services and manufacturing sectors.
Push factors
A perceived or actual poor organizational culture in established firms in the private sector is one push factor: There is a clash between millennials’ belief that business owners treat them poorly, and unfairly, and the contrary belief by the latter that millennials require too much flexibility.
Low wages in relation to the real cost of living is another factor. Entry level jobs in particular for unskilled and new graduates are challenging and leaves the worker, with little time to earn a full incentive package to live a normal modern life. In particular many low skill jobs in the service sector pay wages that are barely enough to service the worker attending work.
Pull factors
That higher wages can be earned, to enable consumption of modern and fashionable, ostentatious consumer goods, through initial self- employment and gradually upscaling to a small business, encourage millennials to go the path of business ownership. Real and tangible support from a wide range of public sector agencies for business ownership has enabled this growth: The Small Business Bureau giving grants and loans; Ministry of Public Security providing training and loans; The New Guyana Marketing Corporation providing opportunities to showcase products and services. The Guyana School of Agriculture has also provided substantial technical assistance and ready help to small agro-processors in attractive packaging, and preserving food etc. The First Lady of Guyana, has also has been at the forefront of providing training and capacity building for ‘self reliance’ through micro-enterprise. It is reasonable to say that there has never been so much support for the small business sector. Indeed, the President of Guyana, himself appealed to the population to go after micro and small business as a means of livelihood, through the metaphoric “plantain chip” business. This article does not deny that Guyana needs more larger investments, and these have been taking place in oil and gas, mining, rice etc.
But the small-business revolution has been such a movement that no honest observer can deny the powerful development force it has become in recent years.
Private initiatives have also played their part such as the UNCAPPED movement created by the GMSA, and supported by ExxonMobil. Indeed, this is the partnership that is needed to realise the potential of Guyana.
Here is a possible list of just four initiatives that can further help small businesses across the length of Guyana to scale up, and become an even greater force for job creation, diversification, community and national development.
a) Easier and cheaper access to finance. Small Business Loans from SBB need further relaxation in conditions, such as the collateral requirement for part of the loan, say for small business that have passed the 5-year survival tenure.
b) Relief from income tax on profits. In some countries, small businesses below a certain revenue size do not pay income on profits, or they pay lower rates than big businesses, and are allowed to reinvest this in the enterprise. This can be done by requesting the enterprise to show proof it has reinvested the tax forgone in growth initiatives such as retooling, or marketing, or training its employees. For example, the Nigerian Ministry of Finance has recently announced such measures. Why should a new small company, pay the income tax rates like large companies, when there are so many other benefits of small business.
c) The Small Business Act needs revision to provide more variation to its definition of a small business of revenue of up to G$60M. The gap from zero to G$60M is too wide, and should allow for more variation within, with a varying reward and incentives system. What about businesses making revenue of G$15M, or G$25M and G$30M?. There could be rewards and incentives to various thresholds and years of survival to give material support to the business owner to move to the next higher level of revenue generated.
d) Finally, decentralization of the work of the SBB, is required for more proactive interaction, and data collection, and programmes in relation to small business in the various capital towns. Officers may be located in municipal offices or regional offices with a work programme that fits into the overall programme of the national effort.
A good business environment has helped the growth of small businesses and with additional policy changes, the sector can make an even bigger contribution to livelihoods.
Joycelyn T.Williams is the Founder and Director of JTW Institute of Management
