There is a suggestion that entrepreneurs in Barbados should be given loans instead of grants in order to create a more vibrant business culture.
This suggestion was put forward by chief executive officer of the Barbados Investment & Development Corporation (BIDC), Dr Leroy McClean, who also made a call for “serial entrepreneurs”.
His comments came today during a panel discussion at the Cave Hill School of Business. The panel discussion formed part of the Global Entrepreneurship Monitor (GEM) national report for 2012.
McClean said there needed to be a balance between helping an entrepreneur and creating a more vibrant business culture on the island, and he did not believe giving an individual a grant was doing that, adding that there needed to be a better enabling environment.
McClean said although he did not believe entrepreneurship could be developed with bank loans, since banks were “not in the business of taking risks”, he said banks should however be more sympathetic towards entrepreneurs and those expressing an interest in starting their own business.
“You cannot start entrepreneurship with bank loans or bank financing. At the same time, if you provide what I call free money or grants for persons who are getting involved in entrepreneurship it will not encourage a business culture. So we have to find a way of balancing those two factors,” said McClean.
He said the BIDC had taken the lead in that regard by making changes to its technical assistance programme where instead of offering a grant, that programme now gave a loan.
While he did not say what the results had been, McClean said it was in an effort to better assist small and medium enterprises.
“We have decided to transfer some of those funds which were used for grants to another agency which will now use it for loans rather than grants,” he said.
“We are stipulating that the interest rates should not be more than four per cent. And that all the persons who are accessing loans you have to come to the BIDC where we have a business development officer and we take you through the processes which will help you to develop your business. It makes no sense giving people money and saying go and start your business,” he said.
Adding that not everyone was able to become an entrepreneur, McClean said there was need for more people to pass on ideas to those who were more capable of setting up an operation.
“There is room for what some people term as serial entrepreneurs. That is a person who will start a business and sell it to somebody else. There are many people who we call ideas persons. They can come up with brilliant ideas and tell you how to get things done, but they cannot do it themselves,” said McClean. (MM)