The $5,000 and $10,000 loans being offered by Government to help entrepreneurs start or grow their businesses are simply not enough.
This assessment has come from Chief Executive Officer of the Small Business Association (SBA) Senator Lynette Holder, who said Barbados and the rest of the region was at point where there was a need for the small and medium enterprises (SME) sector to be better incentivized and facilitated.
“Recently, Government announced a Trust [Loan] Fund programme for start-ups. I dare say that is a commendable effort. It, however, does not go far enough. We are of the view that there is a need to go beyond the $5,000 and the $10,000 that will be provided in trust loans . . . You need to be able to access $50,000 and $100,000,” said Holder.
“So we are of the view that we need to go a step further. We need to ensure that once and for all, we have access to finance so that our firms can build capacity,” she told the opening of a regional workshop on Leveraging the CARIFORUM-EU Economic Partnership Agreement (EPA) at the Radisson Resort on Thursday.
Under the $10 million fund, which was launched eight months ago, qualifying applicants are able to access loans of up to $5,000 with an opportunity to borrow twice that amount after successfully repaying the initial loan.
Turning her attention to the signing of the EPA in 2008 between the EU and CARIFORUM, Holder said since that time there have been a lot of changes across both landscapes, but research showed that the kind of response needed from the private sector was not forthcoming.
However, she suggested that accessing the right amount of funding was still one of the main hindrances, explaining that while the country had a number of funding schemes in place, accessing adequate financing for starting, expanding or getting a business ready for export was still too difficult.
Holder told the regional workshop that while several Barbados-based firms were doing “great work” locally and in some regional markets, they were still in need of “a leg up”.
“The Small Business Association is of the view that, yes, our SMEs need to look beyond our domestic borders and even our regional ones to consider international trade,” said Holder.
“We are also of the view that there is a need to strengthen our SME sector. There is a need to ensure that we build capacity to be able to export. The issue of access to finance is still a bothersome one for us,” she insisted.
Officials are hoping that at the end of the two-day event they will be able to help SMEs to better access required financing and build capacity.
The workshop, which is put on by the SBA in collaboration with the Caribbean Export Development Agency (CEDA) and the EU office here, is being attended by more than 20 small business operators from Barbados and the rest of the Caribbean. They will explore a range of topics including EU rules and regulations and forming strategic partnerships.
Holder said there was a need for small businesses offering similar products and services in the region to form clusters so they would have a better chance of being able to access some international markets.
She said she also saw the need for more policies that encouraged firms to use technological tools “to do better business”.
“It is not our intention that is another talk shop . . . but it is our intention that we put our heads together over these two days and identify concrete solutions that will take us forward,” said Holder.
Minister in the Ministry of Foreign Trade Sandra Husbands said Barbados was in need of export-led growth, and she believed the SME sector would play a critical role in this strategy.
Husbands also expressed dissatisfaction with the level of trade under the EPA over the past decade, saying since its signing, “we honestly struggle to quantify the tangible benefits of the agreement”.
However, she said, “No blame should be cast on either side of the situation. The time has long past for us to really engage the agreement in the manner that the drafters intended.”
Husbands said it was up to the business community to “translate the benefits on paper into economic gains in practice”.
“I challenge you to use the agreement and test the strength of its provisions and to share with us your experiences as you seek to engage it,” she said.
Manager of Competitiveness and Export Promotion at the CEDA Damie Sinanan agreed there was need for increased trade under the EPA.
Without providing details, he said in September his organisation would be taking 16 firms from the region to a forum in Germany as they seek to continue to help regional businesses take advantage of the preferential agreement.
“We are going to work with them to make them ready and to introduce them to vetted and committed buyers so that we can facilitate that type of trade,” he said.