President of the Caribbean Development Bank (CDB), Dr. Warren Smith states that much more needs to be done for small and medium sized entities (MSMEs) in the Caribbean, noting that the region has slid to 126 out of 190 in 2019’s World Bank’s Doing Business rankings.
The latest ranking compares to 81 out of 181 countries in the 2009 survey.
Speaking at the State of the Sector Conference hosted by the Barbados Small Business Association in Bridgetown Barbados, Smith said, “In many Caribbean countries, there is ample evidence of inadequate legislative and regulatory frameworks, weak public sector institutions for providing legal protection and inefficient business support and training services”.
“In some Caribbean countries, for example, property registration continues to be time consuming and expensive, because property rights are not adequately defined or protected. Bankruptcy laws are often excessively punitive; and severe penalties can confound the willingness to invest in new business ventures,” added Dr. Smith.
The CDB boss called on governments to speed up implementation of agreements reached under CARICOM’s Revised Treaty of Chaguaramas, noting that market access has not improved despite removing over 450 barriers to free movement of goods, services, capital and labour in most CARICOM countries.
He complained that there is still no single jurisdiction to allow for the equal treatment of businesses across CARICOM.
Under access to finance, he advised that several mechanisms, including credit bureaux; collateral registries, guarantee schemes and additional financing channels such as junior stock exchanges can be employed to improve this situation.
Since 2015, CDB has committed US$30 million and disbursed US$20 million to over 900 firms for private sector development.
Dr. Warren Smith said the CDB was determined to increase its involvement with MSMEs.
In this regard, the CDB has embarked on new approaches to attract additional financial flows for its MSME programme.
These approaches include the multi-donor Cultural and Creative Industries Innovation Fund (CIIF) which was launched in 2018 with start-up capital of U$2.6 million.
The CDB also plans to increase the use of guarantee schemes to reduce the risk spread in pricing loans to MSMEs.
The Caribbean Development Bank is a regional financial institution established in 1970 for the purpose of contributing to the economic development of its Borrowing Member Countries (BMCs).
Membership includes four regional non-borrowing members – Brazil, Colombia, Mexico and Venezuela and five non-regional, non-borrowing members; i.e., Canada, China, Germany, Italy, and the United Kingdom.
CDB’s total assets as at December 31, 2018 stood at USD3.24 billion. These include USD1.75 billion of Ordinary Capital Resources and USD1.49 billion of Special Funds Resources.