SBA boss wants SMEs paid on time

Tardy payment to small and medium-sized enterprises (SMEs) for goods and services has left some operators “on the brink” and Senator Dr Lynette Holder says Government must step up and deliver prompt payments even as it seeks to improve its procurement policy.

She made the appeal Monday during debate in the Upper Chamber on the Public Procurement Bill, 2021 which sets out Government’s plan to buy goods and services with greater transparency.

Senator Holder said while there is no doubt that the SME sector stands to benefit from the new legislation, Government has to fix its late payments.

“No small firm can wait to have a bill settled in 60 days, 90 days, 120 days, and so while we wait on our procurement regime and all the other policies and so on that are intended to help these firms, equally we must improve the settlement of our debts to small firms in particular,” she said.

Dr Holder, who is the Chief Executive Officer of the Small Business Association, made it clear that while larger companies can afford the delay in payment, for SMEs it could be a threat to their survival.

“I know of examples where firms have been on the brink; can’t pay staff. I know of a construction firm with receivables of over half a million dollars in one particular ministry,” she said.

The Senator noted that while it was understandable that the Government would have cash flow problems from time to time, the vexing problem could be attributed to what she called a “bureaucratic culture” that fails to take into consideration the reality of SMEs.

“There are some sections where I am afraid, persons do not have an appreciation for those who are running businesses and don’t understand and appreciate the concept that time is money. And, therefore, while they are being paid religiously on the 26th, that small firm that provided catering to that function that happened a month ago cannot wait any longer for that invoice to be settled,” she contended.

Dr Holder stressed that an improvement in this area would not just benefit SMEs but would help the country move from its long-running rating as just being efficient on the global competitive index to becoming a sophisticated jurisdiction. (SD)