The Ministry of Finance has finalised an agreement with the Inter-American Development Bank (IDB) to finance the technical cooperation component for the preparation of the policy and institutional framework for the development of small and medium sized enterprises (SMEs) in The Bahamas.
This agreement represents a financial contribution of $430,000 through Compete Caribbean which will be disbursed through the IDB, Zhivargo Laing, Minister of State in the Ministry of Finance said Wednesday.
These funds will be used to contract and pay individual experts or consulting firms needed to achieve the overall objective of putting in place the comprehensive new business support framework for SMEs.
Compete Caribbean is a $40 million programme that is jointly funded by the Canadian International Development Agency, the United Kingdom Department of International Development, and the IDB.
The aim of Compete Caribbean is to provide technical assistance grants and investment funding to support productive development policies, business climate reforms, clustering initiatives, and SMEs in the 15 CARIFORM countries.
This contribution will be in addition to $125,000 by the Government, $52,000 by the Bahamas Chamber of Commerce, and $50,000 from a Multilateral Investment Fund.
“The principal objective of the programme is to develop a comprehensive and coherent institutional framework to support Bahamian SMEs,” Mr Laing told a press conference.
“The programme also seeks to increase the competitiveness of The Bahamas by increasing productivity in the sectors that represent the majority of firms and by diversifying economic activity.”
The execution period of the programme is expected to be 24 months.
Also participating in the press conference were IDB Bahamas representative Astrid Wynter, and Bahamas Chamber of Commerce chairman Winston Rolle.
In The Bahamas’ country strategy with the IDB for 2010 to 2014, SME development was identified as one of the key priority sectors.
Enhancing the competitiveness of smaller sized local enterprises is identified by the IDB as “an urgent matter.”
The project is divided into three components said Minister Laing.
The first will finance the mapping of SMEs in The Bahamas, creation of an SME database, and the design of SME case studies.
The second will be crucial in the enactment of the SME Development Act which proposes the development of an SME Development Agency.
“This agency will be a genuine one stop agency to facilitate SMEs’ access to all and any support services offered,” said Mr Laing.
These include facilities to implement a more user-friendly loan guarantee programme for SMEs, and an SME resource centre to provide non-financial services – administrative, legal, management, human resources, and information technology.
The third component will include a pilot project for SME development in the Family Islands, said Mr Laing.
It will also focus on establishing an institutional framework to support improved market access of tourism-related SMEs.
Too, it will assist in the creation of the Geotourism Stewardship Council which will ensure the sustainable development of SMEs in the Family Island tourism sector.
“SMEs are critical players in the Bahamian economy,” said Mr Laing. “In terms of volume and economic contribution, they are a major force in the sustained prosperity of our nation.
“Indeed, as much as 90 per cent of all businesses licensed in the Bahamas are SMEs, if one defines them as businesses having 20 or less employees.”
IDB representative Ms Wynter said the project “is a demonstration of the commitment of the (IDB) to support the Government and people of The Bahamas in the development of SME sector.”
It was designed based on extensive consultations between the IDB the Government, and the Bahamas Chamber of Commerce and Employers Federation.
“This project will reshape the approach to the provision of financial support to SMEs allowing greater access to finance and at the same time creating an institutional mechanism to provide cutting edge training and cutting edge training and capacity building,” said Ms Wynter.
By Gladstone Thurston
Bahamas Information Services
