Equity push to help small biz growth

Small business owners have been urged to use the Innovation Growth Market (IGM) 200 workshop as a springboard into equity financing, as regional leaders warned that relying on debt alone will hold back small and medium-sized enterprises from scaling and competing.

The two-day workshop was organised by the Ministry of Energy and Business, the Barbados Stock Exchange and the Small Business Association to transform opportunities for businesses, investors and the wider community.

Equity financing allows companies to raise money by offering investors a stake in the business rather than taking on debt that must be repaid.

Daniel Best, president of the Caribbean Development Bank (CDB), argued that debt alone cannot finance the Caribbean’s development and that equity financing is essential for SME growth.

“Across our region, we speak often about the need for economic diversification, innovation, sustainable growth, and resilience, but we must acknowledge a simple truth: none of these ambitions can be achieved without a vibrant, well-capitalised, innovation-driven SME sector. SMEs account for more than 70 per cent of our businesses and a significant share of employment. They are our innovators, risk takers, community employers, and the backbone of social stability.”

Best emphasised that despite the importance of SMEs, many remain undercapitalised, over‑indebted and structurally constrained.

“They are often too big for microfinance, too small or informal for traditional banking, and far too risky for lenders who prefer collateral over creativity… Debt alone will not finance the Caribbean’s development. We need equity — patient, risk-tolerant capital that allows SMEs to grow, modernise, digitalise, and scale. So while equity matters, equity financing is more than capital. It is a partnership.”

Best highlighted the benefits, saying: “Equity gives entrepreneurs breathing room and the flexibility to invest in research and development, adopt new technologies, and enter new markets without the immediate burden of repayment. Many equity investors also bring governance discipline, operational know-how, and market access, which helps businesses grow sustainably.”

He also pointed to the vulnerability of Caribbean SMEs to climate change and other external shocks, noting how equity can serve as a tool for resilience.

“Equity strengthens balance sheets in a region vulnerable to hurricanes, commodity swings, and supply chain disruptions. It becomes a tool of resilience, not just growth. Even with all its advantages, equity remains underutilised in the Caribbean. Our equity markets and venture capital ecosystem are still emerging.”

Best called for a coordinated regional effort to close the financing gap.

“Modern regulatory frameworks, tax incentives for angel and venture investments, regional equity funds, blended finance instruments, public development banks crowding in private capital, and stronger connections between SMEs and regional capital markets are all essential,” he said.

He outlined the roles of development partners and governments in reducing risk at the outset of a project. Derisking early-stage investment through guarantees, including large tranches of contingent recoverable grants, is a tool that the CDB has pioneered under the Nevis geothermal project, he said, referring to the financing of the island’s thrust into geothermal power under which a grant becomes equity finance if the project is successful in generating electricity.

Best said, “We must support SME formalisation so they meet investor requirements, strengthen corporate governance and financial reporting capacity, and build regional platforms to match investors with SMEs.”

Best also called for increased diaspora investment and cross-border equity markets to expand scale beyond national boundaries.

“If the Caribbean is indeed to innovate, transform, and thrive, if we are serious about building resilient, inclusive, future-ready economies, then we must be equally serious about mobilising equity at scale. It is our moment to encourage risk-taking, reward innovation, unleash entrepreneurial energy, build modern capital markets, and empower SMEs not merely to survive, but to lead.”

He ended with a call to action: “Let us commit today to our regional equity agenda, one that positions our SMEs as central actors in growth, catalyses private investment, and redefines development finance for decades to come. When we invest in our SMEs, we invest in our people, our economies, and our collective future.” (LG)