Challenge accepted!

New SBA chairman to answer World Bank official’s call to push harder for change in local financial sector

By Marlon Madden

A day after the Small Business Association (SBA) was urged to advocate for transformation in the financial sector to better serve micro, small and medium-sized enterprises (MSMEs), the new chairman has accepted the challenge.

One of the changes Robert Homer has already identified for the SBA to lobby for is getting banks to relax requirements for entrepreneurs to open bank accounts.

The managing director of RMH Financial Consulting Inc. who assumed the post of chairman on Thursday during the association’s annual general meeting and State of the Sector forum, said that during his tenure, a strong focus will be placed on advocacy for members.

The longstanding SBA member, who will serve in the position for the next two years, welcomed the challenge thrown out on Wednesday night by World Bank Alternate Executive Director for Canada, Ireland and the Caribbean Chris Sinckler for the SBA to be more aggressive in agitating for changes to the financial sector to better support entrepreneurs, particularly women.

Delivering the association’s annual lecture, which formed part of Small Business Week 2023, the former minister of finance also told the SBA that it must push for adjustments in the mechanisms governing lending at international financial institutions.

“He did raise the discussion and it is in a lot of people’s minds now that there are these avenues that exist that we can explore. So we will be looking at exploring some of these new ideas and how they can benefit small businesses in Barbados and throughout the region,” said Homer on Thursday after being elected.

He said that “by and large”, there were still a lot of complaints from MSME operators about the difficulty getting certain things done, including opening a bank account and making a name change with the Corporate Affairs and Intellectual Property Office (CAIPO).

“It seems to a lot of small businesses that is a big thing, just to open a simple bank account with a commercial bank – the requirements to even produce a business plan and all these [documents]. I think it is quite horrendous. Maybe we can advocate for the banks to relax some of these requirements to make it easier for entrepreneurs to get on with the business of opening a bank account so they can run their businesses,” he said.

Homer was unable to immediately say what percentage of the SBA membership or micro, small and medium-sized enterprises were owned by females and how much they contribute to economic activity.

However, acknowledging that women entrepreneurs accounted for a major portion of the sector and contributed significantly to the economic activity here, he said, “We are now looking at measuring to really see how significant that number is.”

One of the major concerns for authorities regarding the sector is entrepreneurs not being registered and paying their share of taxes.

Homer said while he understood the concern, the process of even registering a business was still a headache for some.

Despite the changes taking place at CAIPO where individuals are now able to register a business online in less than 48 hours, Homer said some people were still waiting for other areas to improve such as the time taken to make simple spelling corrections.

“As it relates to taxes, you have to be mindful that the rate of personal income tax is higher than that of corporation tax, which is now at 5.5 per cent. So you would want to incorporate a business rather than just register a business name because, under a business name, you are subject to personal tax rates,” he explained.

The SBA official told Barbados TODAY that the organisation would also continue to focus on training, as it continues its hand-holding of new businesses that were formed during and after the COVID-19 pandemic.

“Training and development is still a very big part of these firms getting to where they want to be. We are here to promote that,” he said.

Homer said officials of the SBA were willing to put forward ideas on pension reform, once invited to do so.

He said that during his tenure, he was also hoping to help strengthen the relationship between his organisation and other small business associations across the region.

marlonmadden@barbadostoday.bb