The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian “family unit” will continue to be undermined by this nation’s high small business failure rate, a well-known consultant warned yesterday, urging the Government to move rapidly on legislation designed to strengthen the sector.

Don Demeritte, who led the research and report for the proposed Small and Medium-Sized Enterprises (SMES) Development Bill, and its support institutions, told Tribune Business that bringing this long-awaited legislation into law was “vital to our existence”.

Without it, and the expanded support platform that it promises to provide for SMEs, Mr Demeritte said the Bahamas would endure “more of the same” when it came to the high failure rate for start-ups and entrepreneurs.

And, with most SMEs owned and managed by families, Mr Demeritte said their high failure rate was undermining Bahamian families and wider society.

Khaalis Rolle, minister of state for investments, told Tribune Business in a recent interview that the SME Development Bill was being reviewed to ensure it co-ordinated with, and did not “duplicate”, any elements in the National Development Plan.

The latter is still being put together, and Mr Rolle indicated there “may be some changes” to the structure of the Small and Medium Sized Business Development Agency (SMEDA), the main entity that the SME Bill will create.

Emphasising that the Government still intended to move forward with the SME Bill, Mr Rolle said his office was “taking a more active role” in it, although the Ministry of Finance still had the lead.

“All of the work has been completed on it,” Mr Rolle told Tribune Business. “We’re [examining] how that fits in with the National Development Plan.

“We wanted to cross-reference to make sure that when it [the Bill] moves forward, we don’t have to make any adjustments because of what takes place with the National Development Plan.

“There may be some changes to it because of the National Development Plan; just the structure of the entity.... We don’t want to duplicate any effort.”

Mr Rolle, an entrepreneur himself and former Bahamas Chamber of Commerce president, said he had “not retreated” from his private sector position that the Government required “an execution arm’ to deliver the support services that SMEs needed to sustain themselves and thrive.

Mr Demeritte, who produced the report on Bahamian SME needs, said the fact that small businesses were the driving force in any economy showed why the sector required focused attention.

“It’s vital to our very existence,” he told Tribune Business of the SME Bill. “Without it, we’re going to see more of the same. We’re going to see more and more SMEs and families go out of business.

“SMEs represent the family unit’ its savings, wherewithal and confidence. When you erode that, you are cutting a piece out of our very essence.”

Empowering SMEs and their family owners would make Bahamians less dependent on government and “all manner of things”, Mr Demeritte added.

“It is extremely important that they act on the recommendations emanating from that report for two reasons. The report reflects the unbridled, untempered reflections of SMEs and what they really need to grow and sustain themselves and their businesses.

“It also reflects the fact that SMEs have very little confidence in the existing [support] infrastructure of the Government and the Chamber, and the also rated the Government agencies specifically as such.”

The report found that 90 per cent of SMEs viewed the Bahamas’ formal business support structure) as ineffective, while 58 per cent cannot afford to invest in the training required to sustain their companies.

“They also called attention to the fact it’s not about money, and money is not the main driver for them,” Mr Demeritte said. ‘They spoke about the need for properly trained employees, and not having the means to properly train them.”

In a subsequent e-mail to Tribune Business, he added: “The report, which was completed 12 months ago, should have been a clarion call for all and sundry who are entrusted to help legitimate entrepreneurs in our society.

“The report, supported by statistical data, highlights the extent to which Bahamian small business persons are hurting. It highlights the deep wailing and national cries of SMEs for help to mitigate against ‘unfair competition’, arrogant bureaucrats, ill-prepared/ineffective business support organisations and an uncompromising banking system.

“The fact that small businesses are hurting is not new, but is oh so relevant and critical.”

Mr Demeritte added that SMEs were not seeking handouts, but help and solutions that could “quickly improve our business culture, employment figures and more”.

“The Bahamas (generally) and SMEs (specifically) need to see the crystallisation of this Act. I really believe it can make a difference, if all stakeholders are represented, transparent and on the same page. No hidden agendas,” Mr Demeritte added.

“If we are to accept that the contention that the pulse of any national economy is directly correlated to the health and strength of its small business sector, then the above speaks to a ‘priority’ concern.”