ALTHOUGH small and medium-sized enterprises (SMEs) contribute almost a third of the country’s gross domestic product (GDP), the sector is facing mounting financial strains owing to government delays in paying for goods and services.
The TT Association of Small and Medium Enterprises (TTASME) says payment delays have disrupted cash flows for many businesses, with some even being forced to close their doors. Compounding the issue, SMEs seeking loans to fulfil government contracts are being met with hesitation from financial institutions, which are a burden that further threatens their survival.
TTASME general secretary Derick Wattley raised these and other issues concerning SMEs in a statement in response to Finance Minister Colm Imbert’s 2024/2025 national fiscal package presented in Parliament on September 30.
Wattley said some leading financial institutions are hesitant to grant loans to service government contracts unless cash guarantees are provided.
“This is a result of government not paying for goods and services rendered on time.”
But the TTASME welcomed the government's announcement that it would pay all VAT refunds to SMEs in cash by the end of 2024.
Wattley said. “This will help improve cash flows for many businesses in the sector."
The TTASME also appealed for an extension to the moratorium on the government’s Stimulus Loan Facility provided for covid19 relief.
Wattley said the association issued a solitary call to the Ministry of Finance to extend the moratorium period for repayment before the budget.
The TTASME was set up in 2022 in response to the economic burdens SMEs faced during the pandemic.
Wattley said the association’s membership is growing and comprises trade professionals, retailers and small manufacturing companies.
“We want to accommodate all levels of small businesses, to represent them, and to relieve the government of their intended programmes and facilities and get them to produce things that can make us more sustainable because we know the government is the driver of the economy,” he told Business Day.
"This association was formed (to seek) their interest in matters of finance and to ensure government support for this sector within their devised economic structures and initiatives."
There are approximately 100 members and the association has recently ramped up efforts to increase it.
Many businesses, it said, have yet to regain pre-covid19 revenue levels and are still facing economic declines.
“The small businesses, we’re not getting help from the banks.
“Would you believe the top financial institutions, especially the ones that the government has an interest in – when you go to them for loans to do government contracts, you’re (being denied). These are things that need to be addressed.”
[caption id="attachment_1114964" align="alignnone" width="1024"] A self-sustaining, solar-powered greenhouse on display by hydroponics and solar panel company Ariaponics.TTASME has called for advancements in agricultural practices, such as the promotion of hydroponics
