By Clinton Urling
During a recent consultative forum to discuss the draft of government’s Local Content Policy document, it came as no surprise that the issue of financing for the small business sector which, incidentally, comprises the bulk of the country’s private sector, surfaced as a topic for discussion.
The issues of access to funding and favourable funding terms for small businesses are not new, nor are they unique to Guyana. Even in countries with well-developed economies, these issues matter to millions of aspiring entrepreneurs. Here in Guyana, despite a wave of wide-ranging economic reforms, access to finance for small businesses remains a major constraint for the growth of the sector. As it happens, micro- and small-businesses are seen by traditional lending institutions as inherently risky. Many of these businesses operate in informal sectors and their owners often are perceived as lacking in business acumen. Their perceived shortcomings include an absence of know-how relating to the preparation of detailed financial statements and business plans, among other weaknesses. These types of business owners may also have difficulties in providing adequate collateral against which to effect meaningful borrowing.