Why promote micro and small enterprises?

- - - micro and small enterprise (MSEs)
          are a distinct vibrant sector in the Caribbean.

Worldwide MSEs is on the rise, associated with, among others, the increasing variety of demand for specialised goods and services and a growing appreciation of self-employment as a career option. There is no doubt that small business is an important part of the economic landscape in all countries, but more so, for developing countries.

Even in the United States, "small businesses contribute much more to the U.S. economy and society as a whole than can be calculated just from the spending and profit that they generate". Small businesses act as a shock absorber for fluctuations in employment. They also are more receptive to creating opportunities for women and minorities, and activities in distressed areas. They tend to be more economically innovative than larger companies and responsive to changing consumer demand. Building, running, and growing small business is part of a virtuous cycle of creativity and increasing prosperity that can be applied by dedicated and thoughtful people anywhere.  There are no secrets and frequently money is less important than a considered combination of imagination and effort.

There is no universal definition of "micro", "small" and "medium" sized businesses. But ILO concluded that MSEs are a distinct vibrant sector in the Caribbean. Between 70% and 85% of enterprises in the Caribbean belong are MSEs, employing less than twenty-five persons. Women account for between 35% and 50% of these MSEs. Most MSEs are in the Food and agro-processing, Marine and fishing, Wood work and furniture, Light engineering and electronics, Garments and Handicrafts, Tourism and service related activities and the Emerging technologies sectors. MSEs create and expand employment opportunities, develop entrepreneurship skills, utilize local raw materials and enhance market opportunities.

During the discussion, there was general agreement among workshop participants that small business was important to food security, export expansion, growth and development. They also agreed that efforts of national governments' in partnership with regional and international organizations are pivotal in creating conditions to foster small business. However, the workshop participants generally agreed that job creation and small business development should not be pursued at the expense of engendering entrepreneurship. In the wisdom of an old Chinese proverb that "it is better to teach a man to fish than to give him the fish"

The following section documents some government projects and national agencies implemented and established specifically to stimulate and small business development in agriculture and other economic activities.

Jacqueline Emmanuel

 

- - - a vibrant private sector is essential for the establishment of long term economic growth, employment and the creation of a nation of stakeholders

 

Private Sector Development (PSD) is a strategy for promoting economic growth and reducing poverty in developing countries by incorporating private industry and competitive markets into a country’s overall development framework. It is important as a strategy in national development for reducing poverty; enhancing the provision of basic services and empowering the poor through the improved quality and access to health services, education and Infrastructure.

Developing a vibrant private sector is essential for the establishment of long term economic growth, employment and the creation of a nation of stakeholders. International financial organizations such as the International Monetary Fund (IMF) and World Bank have long recommended this as a desired strategy for the sustainable development of countries. It is also critical for countries in their adjustment to globalisation and international trade liberalization in wake of multilateral and regional trade agreements.

Historically and internationally, private sector development has had a long history of results. It has been at the centre of the World Bank Group’s activities since the mid-1950s. Special programmes were set up to help promote cross-border capital flows without government guarantee in support of private investment and to facilitate international investment disputes between states and foreign investors. During the 1960s and 1970s, state led development and import substitution policies were being pursued.

In the post-Independence period - 1980s to early 1990s – PSD strategies focussed on "Industrialization by Invitation (ISI)", where enclave industries were encouraged and supported under the USA Caribbean Basin Initiative (1983). However, after 1994, the entry of the North American Free Trade Area (NAFTA) and the WTO was associated with decade of economic instability and adjustment.  PSD usually involved a comprehensive mix of strategies or interventions to enhance the business environment and improve the role and function of the private sector. These primarily include: Trade and Market Access (National Export Strategy), Investment Promotion, Business Skills (in all sectors), Micro, Small and Medium Enterprises Development and Rural Credit Development.

The Office of Private Sector Relations (OPSR) was established in January 1998, for the principal purpose of managing the implementation of the PSD and the proper disbursement of the funding allocated to the said Strategy. It is an agency of the Government of St Lucia funded by the Government of St Lucia and the European Union. The OPSR operates out of the Prime Minister’s Office, and, in so doing, serves as the link between Government and the Private Sector. The OPSR is responsible, therefore, for putting into effect a number of incentive programmes introduced by Government for the strengthening of the Private Sector.

The Private Sector Development Programme (PSDP) is one of those incentive programmes, and was launched in 1999. The rationale of the PSDP is to facilitate and promote the necessary public sector/private sector partnership essential to national development and economic competitiveness. Specifically, the PSDP seeks to continue the process of revitalizing the economy of St. Lucia by increasing and sustaining the competitiveness of the private sector by supporting the development and sustainability of an efficient private sector that is able to compete favourably at the regional and international levels. It operates at four levels:

• firm level, the key activities are credit support for business, conduct of business diagnoses, preparation of business plans, support to business plans, implementation-support for SMEs and support for benchmarking initiatives, which in 2002 had a budget allocation of EC$7,883,000;
• business association, the OPSR provides assistance for product development, market development - human resource development, and for Joint Ventures, strategic alliances and technology transfer, which in 2002 had a budget allocation of EC$720,000;
• Public Sector, OPSR supports business environment enhancement by providing assistance in such key areas, such as, tax and customs administration, judicial systems improvement and policies to encourage joint ventures, external trade and technological advancement. In 2002 the budget allocation was EC$1,056,560;
• OPSR Programme Management Level, which supports staff costs, office equipment and supplies, sensitisation campaigns, evaluation and audits, with a budget allocation of EC$ 2,007,440 in 2002.

The OPSR also implements a Business Upgrading Project Cycle (BUPC) to encourage business enterprises to approach development and advancement, in accordance with a formalised Business Plan geared towards charting the way forward. Another special project is the Cluster Linked Incubator Model for Business (CLIMB) focussed on needs-based clusters and provides support fro up to 15 weeks incubator treatment in specific geographic locations. The core needs identified for MSE treatment in the CLIMB are education, marketing, hardware, software and services. It also implements a Rural Credit Facility to promote rural economic development and diversification by improving access to credit by rural enterprises in Saint Lucia. Its main components are (a) strengthening the rural credit institutions in ways that will enable them to increase the level of credit that they extend to local business, (b) providing technical assistance to select groups/clusters of entrepreneurs in the rural areas to enable them to meet the lending requirements of the credit institutions and (c) providing support to the lenders to enhance the competitiveness/improve their performance.

Among the expected outputs of the OPSR/PSDP, are an increased number of SMEs through the special business clustering project, enhanced competitiveness of firms through benchmarking and quality management improvements, and the enactment of at least three new pieces of legislative/policy measures that enhances the national business environment.v

The OPSR illustrates the important role of Government as part of a network of public and private sector agencies to nurture budding agripreneurs and build a critical mass of successful agripreneurs. It is generally accepted that over 80% of all the small business start-ups fail within the first two years or less. Hence, the nurturing process must provide financial, technical and other support services ranging from micro-financing, to business management advice and training to market intelligence and trade support. Most Caribbean Governments implement similar projects for business development at either a national level, or specific to a particular sector. The following highlights another project aimed at stimulating entrepreneurship and business development in agriculture specifically.

Herscell Brown, Project Director,
Ministry of Agriculture, Jamaica http://www.assp.gov.jm/index.php

The Agricultural Support Services Project (ASSP) began operating in 2001. The ASSP's budget was US$31.5 million, financed by a US$22.0 million loan from the Inter-American Development Bank (IDB), and a contribution of US$8.6 million from the Government of Jamaica (GOJ), with the balance of the funds coming from project beneficiaries. ASSP's purpose was to enhance the competitiveness of Jamaican agriculture in domestic and global markets. The Project has made US$7 million available to the Agricultural Support Services and Productive Projects Fund (ASSPPF) Limited.

The main project components were:
1. Strengthening the Delivery of Agricultural Support Services, designed to develop the critical capacity for delivery of effective agricultural support services including agricultural extension, research, marketing and strategic information, to producers and exporters.
2. Strengthening and Consolidating Agricultural Health and Food Safety Services aimed at improving the effectiveness of the animal health, plant health and food safety systems. This component was designed to protect domestic consumers from illness caused by food contamination, while ensuring that Jamaica’s exports meet international standards.
3. Financing Selected Activities in High Pay-off Productive Projects, intended to increase the competitiveness and profitability of Jamaica’s agricultural producers and exporters. It provided grants to assist in establishing projects to further develop and create new opportunities in the non-traditional agricultural sub-sectors.

The ASSP offered farmers, exporters and agro-producers assistance to develop business proposals and marketing plans. Also, through the Agri-Stakeholders Association, supermarkets, hoteliers, exporters, agro-processors and distributors with secure markets can purchase crops, livestock meats, honey and apiary products, produced by project beneficiaries. Beneficiaries must be agricultural producers (farmer or processor), exporters or individuals actively engaged in the business or trade and able to demonstrate need for the services requested. Although individuals are eligible, emphasis was placed on providing grants for support services for groups of producers or exporters.

Beneficiaries were entitled to services related to:

• extension - on-farm demonstrations and training, analytical services, technical exchanges, including producer-visits to other local and overseas facilities, environmental management, and other training.
• marketing - buyer visits, market visits, packaging and labelling design, marketing and business plan development.
• land regularization – surveys and title searches.
• research - adaptive research, including purchasing new rootstock, establishing pilot plots and product development.
• information - production and market studies.

The ASSP was a four year project and was extended to February 2008.v

The ASSP in Jamaica is similar to the OPSR in St. Lucia in one fundamental respect - they are both government projects, with the bulk of financing from external resources.  Their objectives are fairly similar - to stimulate and nurture entrepreneurship and business development in general, in the case of OPSR, and specifically in agriculture, as was the case of ASSP. While such projects have an important role to play, they are by nature, temporary. Hence the issue of continuity becomes extremely relevant in terms of consolidating any gains from their implementation and building on these gains to ensure sustainability in entrepreneurship and business development.  

Having a constant presence, designed and operated to nurture entrepreneurship and business development on a continuous and long-term basis provides a greater sense of confidence among potential, early and even established entrepreneurs and business interests. It is in this context, that the role national agencies become important. Public-sector agencies are an important part of the network of agencies to nurture budding entrepreneurs. The following highlights the role of the Agricultural Development Bank (ADB) of Trinidad and Tobago.

Ms. Denise Dickson-Cunningham,
Product Development and Strategic Alliances Officer

- - - encouraging and fostering the development of
          agriculture, commercial fishing and associated industries

After over forty years of operation, the Agricultural Development Bank (ADB) of Trinidad and Tobago is seen as the preferred bank for both current and potential agripreneurs. ADB provides a complete package of financial and support solutions, including supervised credit, personalised service, no lending limits, investment and savings opportunity, flexible repayment terms, loan restructuring and group life insurance. ADB deliberately reduces interest rates, offering ‘softer’ terms to attract more agri-producers while minimizing the cost of lending. ADB’s amortized Prime rate of 12% with a maximum of 15% in 2003 reduced to 6% (3.2% add-on) with the maximum rate being 8% -directly opposite to upward moving commercial rates now at >11%. ADB's willingness to accept risk is evident in its involvement along the entire “farm to plate”, including all segments of the production chain - support services, marketing, and agro-processing.

Since 1968, the Bank has injected over TT$3 billion into the sector. It's focus has been on assisting small farmers make the shift from subsistence to profitable business; supporting modernisation and expanding the production base and creating backward and forward linkages between primary producers and agro-processors. Through its interventions, the ADB has promoted the development of strategic sub-sectors of national and economic importance that can contribute the country’s Food and Nutrition Security. Between 2005 (October) and 2008 (January), ADB granted loans amounting of over TT$115Mn to 506 producers, most of which (87%) are engaged in food crop, livestock and fish production. Of significance is that between October 2006 and January 2008, ADB successfully attracted 260 young agribusiness entrepreneurs between 18-35 years, 314 producers between 36-55 years and 373 new producers, not only expanding its portfolio, but also expanding the business base in agriculture.

ADB provides funding of up to 80% of project cost to Individuals 18 years and over, TT citizens or residents or to Companies registered in Trinidad and Tobago. There are 12 Existing Loan Products and 5 new Financial Products targeting market segments by (a) age (Youth Window Loan to encourage youth into agriculture), sector (Cocoa Revitaliser for revitalization of the cocoa industry, Honey-Money for the apiary industry, GroSafe and Ca$h Undercover, targeting the vegetable sub-sector), and location (Tobago Credit Pilot). ADB actively promotes good agriculture by supporting clients' capacity to comply with international food safety standards. For example, ADB's GroSafe loan package provides a range of technical support services, including training in Good Agricultural Practices (GAP) and quality assurance systems. 

But ADB does not do all this alone. Collaboration is an important strategy. One of its key collaborators is the National Agricultural Marketing and Development Corporation (NAMDEVCO).  Such collaboration enables the ADB to go beyond financing to effectively meet the needs of its clients such as:

• Mr. Ravi Renie – who has become a successful youth agri-preneur with the help of ADB’s Youth Window Project loan. Ravi left a secure job in a commercial bank to go full-time into agriculture. He started by studying agriculture at ECIAF to prepare for his entrepreneurship. He now mentors younger students at ECIAF wanting to become entrepreneurs and is keenly pursuing ADB’s technology based Ca$h Undercover Loan. Of his ADB experience, RAVI concluded that “the Youth Window Loan is an excellent product that allowed me as a young farmer to get a start when it was difficult to get funded by traditional banks. I liked the savings & investment options, reduced security requirement and the technical advice/ mentoring I got and I’m still benefiting from!”

• Mr. Dindial Sikumar – an enterprising vegetable farmer of over 21 years who successfully transitioned into agro-processing of condiments from his own grow-box projects with ADB’s help. He is now a National Training Agency examiner in the ‘Grow-Box Method and President of the Bejucal Agricultural Association. Under his brand name “D ‘ Farmers Ltd.” he supplies local fast food chains KFC and Royal Castle with packaged pepper-sauce and also exports other condiments. He has high praise for the nurturing role of the ADB. “I started off in the early days with the ADB and recently made them my sole financiers. I actively promote ADB as the agribusiness financier to meet the needs of farmers within my association and community.”

 

• Mr. Karim Baksh - is retired engineer, trainer in Hydroponics and owner of family run, state-of–the-art lettuce and patchoi Hydroponicom, funded by ADB. He markets his produce under the Brand name “Mama’s Green Garden”. He recalls that “when ADB officials visited the farm for the first time they were very enthusiastic and have encouraged me to keep taking my business to the next level”.

• Mrs. ‘Shantie’ Soogrim - operates the very successful ‘High Quality Seedlings’ Agro-shop and Plant Nursery. She has become a regionally acclaimed trainer in Nursery Production, does consultancy and is a motivational speaker. In crediting her success in part to ADB she says "I will always be eternally grateful to the ADB and my family for believing in my dream, starting me off and supporting my expansion plans. I happily encourage others to borrow and benefit as I did!”

 

The ADB is living its mission to reposition the sector as one that provides lucrative returns to the investment dollar. It is also striving to showcase agriculture as a source of sustainable employment and to attract greater numbers of young people. It embodies some aspects of a ‘One Stop Shop’ operation so that its agriculture clients can be nurtured and supported in a holistic way with as little “hassle” as possible.v

Of note is that almost all of these agencies were established to "bank-roll" entrepreneurship and stimulate small business development. However, as their experiences show, while financing is undoubtedly a severe limitation to entrepreneurship and business development, it is not the only limitation. This is because, even with the improved availability and access to financing, there was an equally important need to provide complementary technical and management support for business success. Hence, 'bankrolling entrepreneurship' has evolved beyond the money.

Entrepreneurship and business development, particularly small business, is crucial to the achievement of development objectives for the region. In recognition of this, CARICOM Heads of Government declared 1988 the Year of Small Business and implemented a range of activities to accompany this event. However, the history of initiatives in the Caribbean to develop small and medium size business can be traced back to the 1960s.  The following paper briefly notes this history and examines the performance to date of the various service providers established to facilitate MSME growth and business development.

Carmen Gomez-Trigg

- - - independence stimulated industrialisation and drove the search for agencies to 'bankroll' industrial growth.

 

During the 1960’s and 1970’s, when Caribbean countries sought independence from colonial rule, they were steered on a course of industrialization. On the recommendation of the World Bank, National Development Banks were set up in the newly independent countries.  The reasons for the introduction of these banks were put forward by Richard L. Kitchen (1986) and included the usual macro-economic objectives of employment creation, foreign exchange saving/earning and development of the capital market. The need was also driven by sector-specific objectives of diversification of industry and agricultural modernization. At the micro or firm level, there was an explicit need to develop small business and encourage entrepreneurial activity. 

The Banks were all set up for the correct reasons and sought to capitalize on the abundance of labour that characterized the regional economies at that time. But the issue of the impact of development banks has often been raised.  Reviews of the performance of development banks suggest that, in general, it has been disappointing. Few were self supporting; a third was in serious difficulties, and as far back as 1983 half of the banks had arrears on a quarter of their loans. Consequently, even by the early 1980s, the World Bank's wisdom in establishing development banks was being questioned.

By the late 1970s and the 1980s, the general response was the formation of replacements for the development banks. However, the mandate of the 'new' agencies was essentially the same and these institutions were also externally funded. These included National Development Foundations (NDFs) established in OECS states and Barbados, Belize and Trinidad and Tobago, funded by USAID and Small Enterprise Development Units (SEDU), founded in Grenada, Anguilla, Antigua and Barbuda, Dominica, St Kitts and Nevis and St Lucia, spearheaded by UNDP and ILO.

CARICOM declared 1988 the “Year of Business.” This declaration acted as a catalyst to stimulate regional awareness of the need for increasing the number and the efficiency of the MSMEs in the region. Again, the justifications advanced were almost identical to the 'firm-level' objectives used to justify the spawning of the “development banks” of the 1960’s. These were the promotion of increased productivity, employment and income, development of small business and encouragement of entrepreneurial activity.

- - - performance of Business Development
          Agencies in the region has been found wanting

During 1988 to 2000, a number of new organisations were formed, some of which were non-governmental organisations (NGOs) and largely donor funded, while others were private institutions with private investors. At this time, there was a shift away from the provision of financing services only. Organisations started packaging a different suite of services, all aimed at making the MSME a more informed client.

The emergence of NGOs in the 1990’s was targeted mainly towards financing micro-credit loans to entrepreneurs, to fund various technical assistance projects and to boost the capacity of the NGOs themselves. The results of the NGOs have been mixed, with some reporting huge successes, and some not doing so well. NGOs have tended to be sector specific, as in the promotion of tourist based industries, or rural development, or the goals of women entrepreneurs. In all instances, however, the heavy reliance on donor funding has mitigated against these organizations. Today, many NGOs find themselves without sustainable incomes, as donor funds are exhausted, or are converted to other, more pressing projects. The NGOs are now involved in a flurry of proposal and grant writing so that they could find the funds necessary to help them fulfill their mission.

The organizations that provide funding seem to have made progress in their area. They have adapted their products and methodology to suit the needs of their clientele and have re-shifted their focus. The provision of ancillary services to the core product of credit has been an added bonus for their clients. They also seem to have had the greatest success in reaching their clientele. The organizations that offer training as their only product have been stymied in their efforts by limited resources and an inability to achieve sufficiently high conversion rates. Training is provided to a large number of persons, but yet the successes are limited.

 

- - - the impact of these measures on both
          business and entrepreneurship development
                   is not as deep as it should be

 

It is evident that currently, there are a number of agencies offering all the services needed to promote entrepreneurs. These services are finance (in the form of loans), training, technical assistance and business support services. However, entrepreneurs are still faced with many obstacles in the areas of policy, regulations, coordination and support, finance, training and marketing.   Questions still arise as to the effectiveness of all the initiatives that have been taken by regional governments. It is evident that the impact of these measures is not as deep as it should be. Indeed, the general lack of monitoring and evaluation and impact assessments limit the capacity to make informed adjustments and amendments to these programmes.  

There is also a serious question with respect to sustainability since agencies that offer support to MSME are largely externally funded through international donors, with some government support. This was vividly illustrated in the case of OPSR (St; Lucia) and ASSP (Jamaica) projects supported largely by external funds. For the donor-funded agencies, sustainability has not been a key objective as the focus has been more developmental than profit-making. The argument has been posited that it is not possible to pursue both goals at the same time. However, in the current climate, international donors are turning their attention to the countries that are in greater need of their assistance and the pool of donor funds that was once readily available is now drying up. Agencies are forced to become sustainable, or close their doors, as the governments of the region are unable to continue to fund all the initiatives that were started by the international community. Sustainability remains an elusive goal.

In this context, the limited success of the development banks and NGOs has signaled the entry and strengthening of Credit Unions and more importantly, the regulated Micro Finance Institutions (MFIs) into the sector. Most of these institutions borrow for on-lending and charge rates way above the commercial banks. The justification is that they provide “access” to credit which would not have been otherwise available to entrepreneurs. Have they been successful? Yes, they have. They have found a “middle road” between the development institutions and the NGOs on one hand and the commercial banks on the other. The prospects for profitability have been so good, that some commercial banks have “downscaled” their operations, and have now created SME Units within their banks so that they could cash in on this venture.

In terms of improving the situation, the following Best Practices for Business Development Agencies are recommended. Best practices have been defined as the “pursuit of world class performance” along the following guidelines. 

• Institutional development: where such development agencies go through a process of institutional development so that they develop various areas of expertise and competence, mainly, Vision, Capacity, Resources and Linkages.
• Performance indicators:  where the organizations should gather information on their target group before they attempt to design programmes. Key indicators are: degree of outreach, operational efficiency, impact or effectiveness, sustainability, start-up rate, survival rate and percentage of direct cost recovery in training programmes.

In addition to these guidelines, it is further recommended that these agencies also strengthen their approaches in terms of becoming more customer-orientated, promoting the services offered, enhancing the delivery of services and engaging in monitoring and evaluation.

As Caribbean governments continue to promote the development of the MSME sector as a tool for economic development, there will be a plethora of agencies appearing on the scene to cater to the needs of the entrepreneurs. Undoubtedly, the NGOs would always be present operating with varying levels of success, but clearly, the new MFI would play a larger, more important role in this process.

References:
ILO 2000  Small Enterprise in the Caribbean
ILO Caribbean Studies and Working Paper No. 6. The Small Enterprise Sector in the Caribbean
ILO World Employment report 2004-2005
Inter-American Development Bank: Enterprise Development Strategy, Small and Medium-Sized Enterprises
Caribbean Business Services Limited: Business Development Services in Trinidad and Tobago, a Brief Overview of the Marketplace for Technical Assistance
Inter-American Development Bank: IDB Group Support to the Microenterprise Sector (2000-2002) Achievements, Lessons, and Challenges
UNDP / Institute of Business (UWI): The Millennium Development Goals and the Private Sector – The Caribbean Business Experience
Kitchen, Richard L 1986   Finance for Developing countries
James, Vanus.             Development Banking in the Caribbean
UN Commission on the Private Sector & Development Unleashing Entrepreneurship: Making business work for the Poor

 

The following presents the experiences of the Credit Union League in St. Lucia and the National Development Foundation (NDF) of St. Vincent and the Grenadines in micro-financing generally, and specifically, in facilitating business and entrepreneurship development in agriculture.

Alexander Joseph

- - - promoting the growth, development and
          self-sustenance of the cooperative movement

The co-operative movement has a strong foundation and important role in rural areas. Most Credit Unions are rural based, with a large part of their membership being farmers and small agri-processors. However, as financial services providers, Credit Unions have not developed their Agribusiness Lending Portfolio to the extent where they are meeting their members’ needs. They have also not developed the mechanisms to engage and/or cater for producer co-operatives.

It is this situation that the St. Lucia Credit Union League (the League) is seeking to address since most persons involved in agriculture are members of non-Credit Union co-operatives.  Its vision is to create an enabling environment where nationals use the cooperative concept in meeting their socio-economic needs. The League seeks to promote the growth, development and self-sustenance of the cooperative movement through advocacy, coordination of collective resources, facilitation of education and training and provision of monitoring and enforcement of standards.

One of the major objectives of the League is to strengthen Credit Unions (CU) so that they provide effective finance for agribusiness. Financing to agriculture/agribusiness has been significantly low. From a sample of 6 leading CUs in St. Lucia, the number of agricultural loans totaled 82, out of a total of 1,609 loans. Among the reasons for this low lending rate are agriculture's high risk factor, low request for agriculture related loans from members, ineligibility of applicants, stringent application criteria similar to that of personal loans, lack of support to agriculture coupled with poor business and financial management practices on the part of the borrower.

While traditionally, the CUs generated their own financing, external sources have become increasingly important to more adequately meet the needs of members. Between 2000 and 2001, the European Development Fund (EDF) via a Special Framework of Assistance (SFA) provided the League with roughly EC$ EC$3,340 million in grants for on-lending through the operations of Rural Credit Facilities (RCF). These RCFs were established for enterprise development in general. At the end of this project, the funds provided were far below the effective demand. In fact, one CU that catered only to farmers had excess demand of EC$1,038,371.00, representing nine (9) agricultural loans and forty three (43) business loans. Poor loan management by some CUs led to serious challenges to the project. In fact disbursement by some CUs of grant amounts from own funds led to a serious strain on cash flows. These funds are yet to be replaced due to the discontinuation of the facility.

As part of a general thrust to stimulate entrepreneurship in agriculture in rural areas and as well, to improve the League's and CUs agricultural financing portfolio, a 'Inclusive Rural Finance for Competitiveness Agribusiness' project was initiated. This project, sponsored by the Government of St. Lucia and IICA as part of the diversification strategy, was designed to mitigate the adverse impacts of the decline in the banana industry. The main actions center on building capacity at the level of CUs to finance competitive rural enterprises, providing training to farmers in Good Agriculture Practices (GAPs) and Greenhouse Technology, and institutional building of producer organizations/networks for farmers and fishers for selected beneficiaries.

 

- - - strengthening the capacity of credit unions to increase financing and provide extension services to clients

 

To enhance the role of the CU and cooperative movement, the League is engaged in constant capacity building among its CU members. This is done through the League’s Statutory Development Fund which provides staff training in loan granting, small business management, project management, financial management among other areas. Technical assistance is also provided to the League's affiliates to improve their Information Technology and Management practices, thus improving their capacity to provide extension services to members who receive agricultural loans. Recognising the importance of CUs as facilitators of rural development generally and rural agricultural business in particular, the League intends to extend this facility to upgrade institutional capacity, to all CUs, beginning with rural based ones. In keeping with its 'cooperative concept', the League is also preparing to develop strategic alliances among larger CUs to enhance the efficiency of their agribusiness loan operations and find a mechanism for representation of Non-CU cooperatives in the League so that they can participate in initiatives aimed at stimulating growth in agribusiness

In an effort to improve the performance of agricultural lending, the League also plans to improve its own Central Finance Facility to provide funds for on-lending to CUs for Agricultural loans. The League is also exploring the provision of a 'Non-Banana Crop and Livestock Disaster Support Facility'. When finalised and if accepted, then it would seek to provide risk protection for producers of non-insurable crops and provide farm-care support to farmers through farmers’ organizations.v

From the nutshell

 

The number and rate of 'early stage entrepreneurs' is a good
measure of a country's entrepreneurial landscape. It shows
the percentage of the population who are willing and able to
undertake an entrepreneurial venture. Cultural, institutional,
economic and demographic aspects play a major role in the
willingness and ability of individuals to become entrepreneurs.
An individual's perception of entrepreneurship is also an
important driver of national entrepreneurial capacity. It affects
both the supply of and demand for entrepreneurs.
The supply or “pool” of potential entrepreneurs is affected by
both willingness and perceived ability to become an
entrepreneur. Education levels, availability and quality of
entrepreneurship training programs can determine how
individuals perceive their ability or skill levels. The demand, or
the “space for” entrepreneurship, is affected both by the
existence of opportunities and by how entrepreneurs perceive
such opportunities to start a business. The quantity and
quality of perceived opportunities may be enhanced by
national conditions - economic growth, culture and
entrepreneurship policy, etc.
Government entrepreneurship policies can have a huge
impact on individuals' perceptions of ability and opportunities
for business. Some government actions that can have positive
effects include improving access to capital, facilitating
business education, promoting entrepreneurship, reducing
regulatory burdens and protecting intellectual property. These
are critical components of a framework for entrepreneurship.

Public Policy and Entrepreneurship

The rise in state venture capital
programs, targeted small business
subsidies and other forms of aid to those
interested in starting new businesses is
evidence that policy-makers understand the importance of
entrepreneurship. An increasing amount of economic evidence,
however, indicates that an ad hoc programmatic approach to
promoting entrepreneurship is not effective.
"The efforts of Caribbean Governments to stem the
unemployment problem ..... are ever increasing. However
there is still a considerable gap to be closed, because at the
root, it is more than simply stemming the issue of unemployment.
Rather it is about the nurturing of a spirit of
innovation, of developing and implementing the
infrastructure and framework to do so and believing in the
genuine work ethic and enterprise."
Michelle Daniel, Head of Small Business,
Caribbean Development Bank
Great opportunities also exist for governments at all levels to
tap into the under-utilized potential of women and youth.
Entrepreneurship has been gaining respect as a viable
career choice for youth and women. The policies towards
creating an enabling environment are also becoming more
viable in many countries. The aim is not to create
subsistence businesses, but to nurture and socialize a new
breed of entrepreneurs who can create competitiveness,
wealth and jobs, to grow and sustain regional economies.”
Marcia Brandon, Executive Director,
Barbados Youth Business Trust (BYBT)

 

Entrepreneurship is central to growth, poverty reduction and
development.
GEM notes that entrepreneurial activity occurs in an economic
system that must provide the 'oxygen' of resources, incentives,
markets and supporting institutions to the growth of new firms.
They offer ten key Entrepreneurial Framework Conditions as
follows:
1. Financial Support: including grants, subsidies, loans and equity
for new and growing firms;
2. Government Policies: the extent to which new and growing firms
are prioritised in policy and regulation for new and growing
firms.
3. Government Programmes: existence of direct programmes to
assist new and growing firms at all levels of government.
4. Education and Training: extent to which training in creating or
managing small, new and growing business is incorporated in
the educational and training system.
5. Research and Development Transfer: the extent to which
national R&D will lead to new commercial opportunities and
whether or not these are available to new, small and growing
firms;
6. Commercial, Professional Infrastructure: accounting, legal
services and institutions that allow or promote the emergence
of new, small and growing firms;
7. Internal Market Openness: extent to which markets change
dramatically from year to year and new firms are free to enter
existing markets;
8. Access to Physical Resources: communication, utilities,
transportation, land or space, at prices that do not discriminate
against new, small and growing firms;
9. Cultural, Social Norms: extent to which they encourage or do not
discourage individual actions that may lead to new ways of
doing business or economic activities - culture of
entrepreneurship and status or respect for entrepreneurs.
10. Intellectual Property (IP) Rights Protection: extent to which the
IP of new and growing firms is protected and enforced under
the law.