MSME funding inadequate, says Walters

A key critic of the Mia Mottley administration’s small business policies has slammed the allocation of “only” $10 million to the Trust Loan Funds Ltd in the upcoming financial year.

Calling for the implementation of government-backed venture capital financing for micro, small and medium-sized enterprises (MSME), Democratic Labour Party spokesman on business Ryan Walters said it seemed the governing Barbados Labour Party (BLP) continued to ignore their plight.

Walters, a DLP vice-president, was reviewing Monday’s start of the 2021/2022 Estimates debate in Parliament on the Ministry of Energy, Small Business and Entrepreneurship.

Under that ministry, the Trust Loan Funds Ltd has been allocated $10 million.

During the debate, Minister of Energy, Small Business and Entrepreneurship Kerrie Symmonds reported that over the last several months, Government had provided some $22 million in support for the MSMEs through supplementary funding, boasting that Barbados was the only English-speaking country to provide such support to the sector during the COVID-19 pandemic.

But Walters dismissed as foolhardy the effort to only allocate $10 million to the agency that is tasked with providing loans to businesses, knowing that they were in need of greater support.

The fund, which was introduced in October 2018, provides loans of up to $5,000 with an interest rate of five per cent to qualifying applicants. They have the opportunity to borrow twice the amount upon successful repayment of the initial loan.

Walters said: “The Estimates has allocated $10 million, this is less than what was afforded to the small business community in the 2018 budget pre-pandemic. It is a shame and an insult. This further confirms that the government has no interest in restructuring the economy, even after the pandemic has provided them a perfect opportunity to do so.

“This follows the trend of disregard and disrespect that this administration shows to the small businessman,” he said, adding that the presentation from the Minister of Small Business and Entrepreneurship on Monday regarding the Estimates “has confirmed that the government has no intention to go above and beyond to empower ordinary Bajans:

Questioning why the government was lending to MSMEs at a rate of five per cent while also boasting of getting its loans over the past year at a rate at one per cent, Walters also proposed adopting “a more progressive funding model” for MSMEs.

He said: “The facilitation of venture capital financing rather than 100 per cent loan financing has to be included. There has to be an element of risk and investment on the part of the government if the sector is going to thrive and provide the economic gains down the road,” he said, adding that the MSME sector’s contribution to employment should not be ignored.

“I always like to remind everyone that micro and small business account for approximately 92 per cent of businesses and 60 per cent employment in the private sector. Numbers don’t lie. The sector is important but the Government is playing blind.”

The DLP spokesman accused the Mottley administration of taking more from residents since 2018 than it has given, highlighting an increase in bus fares, the introduction of a sewage tax and a gas levy.

“Additionally, they restructured the government debt owed to the NIS which will result in Bajans losing close to $1 billion down the road and our pensions are affected,” he said. “On the other hand, they have given almost $1 billion to big business by writing off VAT owed to the Government.”

Pointing to continued business closures and the length of time businesses had to wait for the monetary assistance, Walters accused Government of continuing to take a greater interest in protecting larger businesses, as he referenced the $300 million assistance scheme in place for the tourism-related establishments under the Barbados Employment and Sustainable Transformation (BEST) programme.

“Minister Symmonds should be asking the Prime Minister for some balance and fair game for his ministry. The micro and small businesses can do with some of that $300 million,” said Walters.

He suggested that Government should be taking a different approach by offering greater assistance to entrepreneurs and micro-businesses, explaining that they, in turn, supported larger businesses.

“The small man still has to purchase products from big business. He or she has to depend on services from the bigger enterprises to run their business or what some may refer to as their hustle. Everyone wins when you support from the bottom up and this is all we are asking the Government to do,” he said. (marlonmadden@barbadostoday.bb)

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