Some small businesses will not meet bank loan criteria- alternative financing mechanisms needed, Hinds says

(www.stabroeknews.com) President of the Georgetown Chamber of Commerce and Industry (GCCI) Lance Hinds wants small business aspirants to come to terms with the reality that some of their business proposals will fall short of the requirements for commercial bank loans and that, accordingly, realistic alternative ways must be sought to finance their ventures.

“Not all startups and emerging businesses can go to the banks to borrow funds,” Hinds told Stabroek Business in an interview just over a week ago, part of which was published in last Friday’s edition. Simultaneously, the GCCI Head said that some grant schemes, “while extremely helpful, are sometimes tied to a series of conditionalities that can be difficult to adhere to.”

Accordingly, Hinds said, there is a critical need “to encourage the creation of alternative financing mechanisms to ensure that startup businesses have an optimal chance of succeeding.”

Hinds’s comment comes in the wake of a protracted debate in the business sector over what small business owners and aspirants have described as a negative attitude in the commercial banking sector to lending for startups and for growing small business operations. Some commercial banks, meanwhile, have rolled out modest lending schemes for the small business sector though some businessmen and women still insist that banks’ collateral criteria continue to be unreachable for small business owners and aspirants.

While Hinds’s pronouncement included no specific proposal for alternative funding for the small business sector, he disclosed that the Chamber plans to meet the Small Business Bureau to learn more about the now considerably delayed bank lending and grants scheme provided for under the first US$5 million phase of its two-phased project.

The Bureau’s grant scheme is tied to a job-creation conditionality which beneficiaries are required to fulfil. More than 2,000 small business owners and aspirants have signed up with the scheme.

Meanwhile, Hinds said the GCCI believes that the cornerstone of Guyana’s future reposes in technology-driven, knowledge-management industries and economies and that this sector will “play the leading role in transforming the country’s economy and putting the nation on the path to developed country status.”

Hinds told Stabroek Business that the realisation of this goal “will involve the growth of the ICT sector as an independent, dynamic business sector and also the application of ICT as a cross cutting component in all other productive sectors to achieve rapid and sustained development.”

And the Chamber Head is calling for “an action-oriented portfolio of initiatives formulated over distinct time frames for our long-term objectives, medium-term objectives and short-term priorities.”

And according to the Chamber Head the overall objective of this portfolio of initiatives must be “the development of an environment that will consistently enable the creation and sustainability of ICT related businesses and the development of a competitive knowledge economy.”

Hinds said that, simultaneously, there is need to create policies and programmes that will stimulate new business opportunities, innovation and opportunities in the local ICT sector.