Good news for small businesses

MORE financial assistance is coming to this country’s small and medium-sized enterprises (MSME).

Fund Access, a Government lending agency, has received an additional $10 million in funding to assist the growth of the MSME sector by way of various loans and grant financing.

In the 2016 Budgetary Proposals, the Minister of Finance and Economic Affairs, Christopher Sinckler, announced that a special fund capitalised to the tune of $50 million was to be created for the purpose of providing a blend of grant and soft loans to fund this sector.

The announcement of the $10 million capital injection was made on Monday night by Donville Inniss, Minister of Industry, International Business, Commerce and Small Business Development.

Inniss spoke at a Barbados Small Business Association’s meeting at Bagnall’s Point Gallery, Pelican Village.

He warned the eager small business owners, however, that “this will be no slush fund”.

“Before individuals rush to Fund Access expecting to collecting cash or cheques, please note that I have directed the Board of Fund Access to exercise best management practices and business support policies in determining loans or grants to be disbursed,” Inniss advised.

“This is money that has been raised from taxpayers of this island and I will not be part of any regime that wastes such funds,” he stated.

The Minister pointed out that for those who are looking for grants, his position as Minister is that people have to move away from a grant mentality in this island.

He further noted that there is a significant cost to financing and “if you wish funds to invest in a business because you intend to make a success of that business, well then be prepared to accept the cost of that finance and be prepared to share some of your revenue with the lender”.

The Minister added that, “If we aggressively pursue a policy of primarily grants, then we will soon find that there is nothing left to provide for others who may be in need. So let us not get greedy here.”

Fund Access, Inniss explained, is finalising its new grant financing policies. He met with the Chairman and CEO of Fund Access last week and indicated that Fund Access’ Board is to urgently give positive consideration to increasing its loan limit from $100 000 per applicant to $150 000.

“Furthermore, Fund Access will shortly agree and provide loans with more flexible interest rates and other terms that ought to be of great assistance to members of the small business sector,” Inniss said.

The Minister expects that the agency will soon be announcing the details of such loans, their basic terms and guiding principles.

According to Inniss, “Between 1998 and 2016 Fund Access approved 1 706 loans for an amount totalling $51 million. I therefore expect that there will be a significant increase in loans over the next year.”

Increased funding potential is useless unless we are able to have a faster turnaround in the processing of loans by Fund Access, Inniss said, while also explaining that they are instituting the necessary upgrades to technology, as well as strengthening staff to give effect to such.

He said that Fund Access cannot and will not seek to replace or compete with the commercial banks in respect of commercial loans as the agency’s role is perhaps more developmental in nature.

It was also revealed that two weeks ago he met with the Chairmen and management of the Fund Access, the Department of Commerce, The Fair Trading Commission and the Barbados National Institute, “who are all part of my Ministry, to review with the Barbados Investment and Development Corporation improved accommodation for staff at these key agencies. If our staff are not provided with safe and clean work environments, then we cannot expect them to adequately serve the public”.

His Ministry also views the Small Business Association to be a vital partner in the development of this sector and therefore expects that businesses will work closely with Fund Access to enhance access to financing.

In addition, he hopes that they will continue to engage in the training and development of projects for this sector, that state agencies may direct clients and potential members to Fund Access and that they can continue to collaborate on policies as well as programmes to grow and diversify this sector.

The Minister further explained that the remainder of money will be allocated over time and he did stress gone are the days of waiting forever to know if one is approved, while noting that he is optimistic about the small business sector that has saved the economy in the past.