New micro-credit fund launched
November 7, 2002
President Bharrat Jagdeo has said that the launch of a new fund to finance micro and small businesses will be a boost to the confidence of a shaken business community.
Delivering the main address at the launching of the Small Business Development Finance (SBDF) at Le Meridien Pegasus Hotel yesterday Jagdeo said the escalation in crime has shaken the confidence of businessmen but he promised that the government is working to overcome this problem and will succeed.
He commended the Board of Directors and the management team of the new agency which will benefit "the small man" wishing to become gainfully employed through the small business sector. Jagdeo said he was impressed with the level of work the Chairman of the Board of the SBDF, Sattaur Gafoor has been involved in as well as that of the Managing Director Manjula Brijmohan. Brijmohan previously worked with the Institute of Private Enterprise Development (IPED).
Brijmohan said the SBDF was a non-profit private sector institution operating within international standards of best practices of micro-financing institutions.
It will provide financial and professional services and personalised investment/products assistance to advise entrepreneurs in making sound decisions.
The financial aspect includes retail micro-lending and development finance.
Retail micro-lending means that all retail loan products are specifically designed to facilitate urban enterprises, rural small farmers and non-farm enterprises to take advantage of the economic opportunities and allow for participation in the environment of increasing competitiveness.
To qualify for SBDF assistance, the applicant must be over 18 years; the business must be locally owned and controlled; must have the potential to create jobs; the applicant must be willing to operate a system of account/record keeping.
According to the brochure, the applicant must have a reasonable degree of risk taking and good achievement capacity; must have a viable economic idea and a plan to implement the same; and evidence of a minimum level of security.
Existing and new businesses can apply but experience in some business activities would be an asset.
Jagdeo said at the level of the government, support would not only be given to micro-enterprises in terms of financing but that hopefully, the Small Businesses Act will be tabled in parliament shortly.
The passing of this act, he said, would make a big difference to small businesses, which because of their size and the features of the country's tax system do not benefit. This is because they do not import their own commodities and as such are taxed twice.
Speaking about the democratising of credit and enhancement of business ownership which is prominently advertised in the SBDF brochure, Jagdeo said for interest rates to evolve there was need for sound fiscal management which the government has been practising.
He said there were issues about interest rates being too high especially in the micro-credit agency and he hoped borrowers would be able to access cheaper credit. (Miranda La Rose)