DESPITE market shares being at its lowest for SMEs, especially in the wake of covid19 and other major shocks which have affected businesses worldwide, the TT Stock Exchange (TTSE) and Central Bank are saying now is the perfect time for SMEs to join the TTSE and have access to new revenues.
Both entities, represented by the bank's Deputy Governor Dr Dorian Noel and the exchange's CEO Eva Mitchell spoke at the launch of the SME mentorship programme on Tuesday.
“This is the right time,” Noel said. “The launch of this mentorship programme and the launch of the SME market with fiscal incentives is to address that issue of weakness. They are weak now, post covid19 and we have to do something.”
SMEs at their weakest
The Small to Medium Enterprises (SMEs) account for 60 per cent of employment globally, and is the main driver of productivity according to Noel. Citing CSO statistics from 2018, he added that domestically, 65 per cent of the 26,000 businesses were SMEs which employ less than 25 people.
The number of SMEs employing less than five people numbered 12,000 or 44 per cent of registered businesses.
A Central Bank estimate shared by Noel indicated that the SME sector contributes 30 per cent to the GDP and employs over 200,000 people.
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However, the SME sector took some of the hardest hits during the pandemic which saw the shuttering of businesses amid lockdowns.
“The SME sector is on its back legs right now,” said Diane Hadad, head of the Tobago division of the Chamber of Industry and Commerce, at the launch held at the Hyatt Regency in Port of Spain. “They may even be lying down; either face down or legs up.”
Hadad questioned whether it was the right time for these businesses whose market shares were significantly reduced because of a lack of performance over the past two years.
Dorian pointed out that there were several shortfalls in the SME sector that is hindering its growth, including a low level of technology adoption and low levels of internationalisation and participation in the global value chain.
He said technology adoption could be addressed by the provision of grants and tax incentives for digital transitioning, an element which was covered in some ways in the 2022-2023 budget.
Internationalisation could be managed by funding for market research and access and getting SME market access into trade policy.
However, one of the key factors for growth in any sector – access to finance, has also been a struggle for the SME sector.
In his address on Tuesday, Finance Minister Colm Imbert said some of the areas affecting SME’s ability to acquire financing includes a lack of proper and up-to-date documentation, poor debt repayment records, non-adherence to statutory obligations and an inability to meet corporate government standards.
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