Government initiatives to help struggling small businesses coming soon
Government will be rolling out a variety of programmes and initiatives to help Micro, Small, and Medium-Sized Enterprises (MSMEs) over the next few months.
The initiatives come at a time when a COVID-19 Impact Study by the Barbados Coalition of Service Industries (BCSI) shows that services sector MSMEs were struggling from the ripple effects of the pandemic.
According to Permanent Secretary Esworth Reid, the Ministry of Small Business, Entrepreneurship and Commerce will soon launch a suite of comprehensive legislative reforms including the Vendor and Market Facilitation Act designed to decriminalize and reposition vending allowing creatives to trade freely and without hassle both within the physical and virtual market place.
Additionally, the Ministry will introduce in Parliament by year-end a National MSME Act intended to create legislative space to facilitate expanded growth of the sector.
By mid-August, a virtual Financial Literacy Bureau will be implemented to facilitate satellite clinics across the island for youth, businesses and households to receive training to create a culture of financial literacy and wealth creation. Details will also soon be available on a small technical assistant package administered by the United Nations Development Programme (UNDP) in partnership with the Ministry.
Reid said the Ministry has also developed a draft “business cluster strategy” for MSMEs to network, collaborate and communicate challenges faced that could result in business failures. Other programs in advanced discussions with partners include implementing a Junior Stock Exchange and a Collateral Registry both designed to ease access to finance for MSMEs.
Additional assistance, such as the wage subsidy financial option providing savings to businesses that retain 75 per cent of their staff during the COVID-19 environment, also remained available.
According to the BCSI’s COVID-19 Impact Study, respondents from MSMEs in the services sector reported a significant revenue decrease. Eighty-three businesses responded to the survey conducted from May 22 to June 9.
“The one thing that is clear from the results of this Study is that the micro, small and medium-sized enterprises, that sector within Barbados, are really under threat. Eighty-three per cent of all the respondents reported a decrease in revenue due to the COVID-19 pandemic, with the average fall in revenue for this group significantly high at about 62 percent,” said BCSI Executive Director Graham Clarke.
“The outlook for the future, at least in the short term, is quite pessimistic from those who were surveyed, with only 15 per cent of those surveyed expressing the view that things will change for the better in the short term. So there is much work to be done,” added Clarke, who noted the BCSI fully supported the reopening strategy put forth by Government to mitigate COVID-19’s negative impact.
Comments by BCSI and Ministry officials came during a press briefing this week to present results of the survey designed to measure the pandemic’s impact to the services sector and use the data to inform BCSI programming. It was also carried via Zoom.
The services sector contributes approximately 75 per cent of the country’s Gross Domestic Product (GDP), employs over 80,000 persons, and facilitates exports of over BBD $800 million, the Permanent Secretary noted.
“The services sector is dominated by approximately 70 per cent of MSMEs, which is the micro, small and medium enterprises. And, given the flexibility, nimbleness and resilience of this important group, even in the current difficult circumstances there remained considerable hope for their survival and sustainability if we all can rally together to ensure this desired outcome,” Reid added.
“While sober reflection suggests that all businesses will not survive the anticipated vagaries of a post-COVID-19 environment, serious consideration must be given by existing businesses to increase their productivity so as to positively impact the wider national economy,” Reid further stated.