Minister of Energy and Business Senator Lisa Cummins yesterday unveiled Barbados’ ambitious vision to become the small and medium-sized enterprise (SME) and start-up capital of the world.
She was addressing the launch of the Innovation and Growth Market (IGM) 200 initiative at the Lloyd Erskine Sandiford Centre.
The IGM 200 represents a shift from traditional debt financing that has constrained small and medium-sized enterprises. Cummins painted a stark picture of the current financing landscape, revealing that in one sector, businesses were forced to rely entirely on personal loans at a crippling 12.5 per cent interest rate.
“Twelve and a half per cent to finance business – it’s not tenable,” she said. “Debt financing, especially if you are financing it as a personal loan, is not sustainable to grow your business.”
The initiative aims to expose 200 entrepreneurs to equity financing concepts, providing them with the same tools that large energy companies use when structuring multimillion-dollar projects.
Cummins announced plans for a comprehensive National SMEs Financing Partnership featuring three key components: a joint equity finance readiness programme, an SMEs growth and cofinancing facility, and a National SMEs Support Alliance bringing together financial institutions, business support organisations and development partners.
“This IGM we’re launching today is more than a financial platform. It is a coalition
for growth,” she said.
The initiative promises to transform small businesses from mere survivors to scaleable enterprises, creating what the minister described as “generational wealth that is passed on to your children”.
Barbados Stock Exchange managing director Marlon Yarde highlighted the success of similar initiatives across the region. Jamaica’s Junior Market has grown from a single listing worth $500 000 in 2009 to more than 45 companies with total capitalisation exceeding $900 million today.
Dr Lynette Holder, chief executive officer of the Barbados Small Business Association, spoke of the stark reality facing regional businesses.
“Across Latin America and the Caribbean, SMEs represent almost 99 per cent of businesses and nearly half of jobs in our countries, but yet, the data showed that they receive only about 12 per cent of total credit,” she said.
The IGM represents a solution to broaden financing beyond traditional debt, providing long-term growth capital that seed funding and traditional banks cannot supply, she said. ( DDS)
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