The Tribune

It is no secret that micro, small and medium-sized enterprises (MSMEs) play a major role in stimulating economic development in The Bahamas. Both governments and large private enterprises should begin to ask themselves what they can do to encourage the growth of MSMEs, thus enabling them to contribute more significantly to the national economy.

The concessions given to large (often foreign-owned) businesses in the name of increased employment opportunities often far eclipses the investments made in promoting and building MSME capacity. The immediate gratification of quick jobs without significant thought to the long-term impact does not lend itself to the narrative of economic empowerment.

This week’s column explores ways that governments and large enterprises can provide ongoing assistance to MSME growth and development in The Bahamas.

Removing some of the unnecessary access to capital challenges

The challenges most frequently experienced when establishing and developing MSMEs are the financial ones. It is very difficult for them to receive loans due to the high risk involved. Governments could assist in numerous ways, including providing collateral and guarantees, plus creating and supporting specific loans and grants to MSMEs that achieve specific goals, such as improving productivity or hiring additional personnel.

Governments should be encouraged to do more business with MSMEs

As simple as this sounds, this alone could have a significant impact on MSME development. When governments intentionally source the goods and services supplied by MSMEs across agencies, it sends the right message to other participants in the economy.

Governments should subsidise essential capacity building services

One of the great challenges that micro, small and medium-sized enterprises face constantly is sourcing and growing top talent. It is often difficult to find and train the right people, and this is problem is exacerbated for MSMEs. The Government can subsidise training for MSME employees in a bid to increase their productivity, and ease the investment required by MSMEs after hiring new staff. Other support mechanisms such as deploying state workers to registered MSMEs could also go a long way.

Government can support marketing Initiatives

Market exposure is yet another very important aspect that helps businesses to succeed. The Government can help organise and subsidise networking, conferences and other collaborative events, as well as trade shows where MSMEs can participate at a much lower cost than a regular commercial event. Such government-sponsored platforms, whether industry-specific or general, are very effective in helping MSMEs attract customers and business partners.

Governments should support export and transportation initiatives

Another area that MSMEs tend to be excluded from is exports. More and more governments around the world are taking steps to help MSMEs enter export markets in order to expand and diversify. Offering assistance, particularly to MSMEs that have export potential, is vital for real growth to occur. This includes offering opportunities for international exposure, enabling the businesses to enter other markets and expand their activity. MSMEs may be invited to join ministers and other government delegations when travelling abroad in order to participate in events that attract media and partnership opportunities.

When businesses move up the value chain, it creates higher salaries, which leads to higher economic output per capita and a higher standard of living.

• NB: Ian R Ferguson is a talent management and organisational development consultant, having completed graduate studies with regional and international universities. He has served organisations, both locally and globally, providing relevant solutions to their business growth and development issues. He may be contacted at tcconsultants@ coralwave.com.