Single mothers are bearing most of the brunt as the local small business sector continues to shrink under harsh economic conditions which persist from 2015.
This is according to Mohamed Ali – a Director of the Small Business Development Finance Trust Inc. (SBDFTI) during the entity’s 14th Annual General Meeting at the Regency Hotel today (June 26, 2017).
Ali revealed that there was a major reduction in monies disbursed from SBDFTI to clients in 2016 compared to 2015. Ali said some $307M was distributed to clients in 2016 compared to $537M in 2015 – representing a decrease of 15 percent.
He also noted that loans have decreased too, from $803,000 in 2014 and $670,000 approved in 2015 to $577,000 in 2016.
During the event, Business Minister Dominic Gaskin admitted that the spending pattern of the public has changed drastically, resulting in a deceleration in business activities.
“I think there has been an ease in spending and we have to accept that for whatever reason people are not spending as they use to. That doesn’t necessarily mean that people are spending less, it could mean that people are spending in different ways,” he stated
However he said when businesses experience a dip in the economic cycle, opportunities are presented.
In this regard, Gaskin urged that businessmen use this point in time to rethink, refocus and do business differently.
“In our case, if we’re buying and selling and people aren’t buying then it is a good time to think about moving into more productive enterprises, more value added enterprises,” he explained.
The Business Minister underscored the importance of market research in order to remain competitive, noting that businesses should not rely solely on targeting local markets.
“Businesses must have a good understanding of the requirements of the market they which to supply … We also need to understand that people’s needs change and we need to adapt what we do, what we produce and what services we provide,” Gaskin advised.
Further, Gaskin noted that access to finance does not guarantee a successful business operation.
“Access to financing will only benefit your business if you know how to manage your finances in a way that utilizes credit efficiently, and allows you to repay your loans on schedule and generate profits at the same time,” he outlined.
Meanwhile, the former Private Sector Commission (PSC) Chairman and another SBDFTI Director, Norman McLean made a charge for the relevant authorities to find out why the small business sector is shrinking given its importance to the local economy and the fact that micro enterprises are flourishing in other parts of the world.
“Maybe we need to analyze why this is happening…there is a real challenge for us in the small businesses and it is surprising because in India for instance, small businesses have been growing, it’s been tremendous, very successful and maybe we need to look at why it is successful,” he said.