Thu | Jun 20, 2024

Growth & Jobs | SMEs the primary engine of growth in Jamaica, says Garnett Reid

Published:Tuesday | June 11, 2024 | 12:07 AMPaul H. Williams/Gleaner Writer
Senator Aubyn Hill, minister of industry, investment and commerce, preparing to address the Small Business Association of Jamaica’s (SBAJ) business social, held on Friday, May 31. To his left are Dennise Williams, vice-chair of the membership committee o
Senator Aubyn Hill, minister of industry, investment and commerce, preparing to address the Small Business Association of Jamaica’s (SBAJ) business social, held on Friday, May 31. To his left are Dennise Williams, vice-chair of the membership committee of the SBAJ, and Valerie Veira, chief executive officer at the Jamaica Business Development Corporation.

“THE SMALL and medium-size enterprise sector (SME) is by far the primary engine of growth and development in the Jamaican economy. The Small Business Association of Jamaica (SBAJ) has successfully represented the SME sector in its growth and development since 1974.”

The second vice-president of the SBAJ made these remarks at the SBAJ business social, held at the Liguanea Club in New Kingston, St Andrew, on May 31, under the theme ‘Grow Your Business Through Networking’.

The SBAJ, celebrating its 50th anniversary this year, is a voluntary, not-for-profit membership organisation that was formed in November 1974 by a group of business people headed by the late Dr R. Danny Williams. The Private Sector Organisation of Jamaica, Jamaica Business Development Corporation, and other well-known organisation were evolved out of the SBAJ.

“I’m recommending that we have a memorial in honour of the late Dr Honourable R. Danny Williams for his outstanding contribution to the growth and development of the micro, small and medium-size enterprise,” Reid also told the gathering.

While the mission of the SBAJ is to support the economy of Jamaica through the development of the small business sector, the vision for the SBAJ is “to become an organisation of national, regional and international impact with economic, social and political advocacy, while being the voice of the small business sector in Jamaica”.

Michael Leckie, president of the SBAJ, also spoke at the occasion. He shared that 88 per cent of small business owners say inflation is impacting their business, according to the Bank of America Small Business Owner Report.

“We believe Jamaica is no different in that regard. Further, a survey of our trading partners in the US, the UK and Canada suggests that interest rates are the highest in the last 27 years. There are more findings that are very similar to what we know in Jamaica.”

Small businesses say that 62 per cent feel their business has fully or partially recovered from the pandemic, and nearly half (48 per cent) cited increased consumer spending over the past year as a key driver in their recovery. Additionally, 70 per cent of business owners plan to seek financing for their business in the year ahead, and 26 per cent plan to hire, the highest percentage since fall 2018, according to the Bank of America survey. And how does this augur for SBAJ stakeholders?

“We want to partner with our stakeholders to make accessing expansion tools more accessible. First, many of our members are turned away from the banks due to their credit report and credit score. We believe it is time for the Ministry of Commerce to partner with the Consumer Affairs Commission and the Bankers Association to host credit repair clinics,” Leckie said.

He also believes that borrowing could be vital for many businesses over the coming months, as “cash becomes tight and the economy becomes more unpredictable”. Yet, higher interest rates make it more expensive to borrow, thus creating a challenge to funding, growth and future prosperity.

“So there must be a way to create a culture where credit specialists help small businesses improve their credit score to open up new lines of credit. Next, we are open to partnership to make accessing grants a greater part of the mix of funding available to small business owners. Again, training on how to write grants would be key, as the applications are truthfully onerous,” Leckie revealed.

“And finally, we at the SBAJ believe that the stakeholders in this biz social that marks our 50th anniversary have all the tools necessary to help our members achieve a healthy credit score and positive cashflow, make it easier to find funding. And with extra cash in the bank, you’re set to ride out the challenges of high inflation and rising interest rates.”

Senator Aubyn Hill, minister of industry, investment and commerce, was slotted as the keynote speaker. He is of the view that entrepreneurs cannot get rich doing business in Jamaica. He suggested that the SBAJ should make an effort to help members sell to the wider Caribbean and the Jamaican diaspora. His ministry itself has been supporting this idea by hosting travel missions to the Caribbean.