During a recent consultation forum to discuss the government’s draft Local Involvement Policy document, it was not surprising that the issue of funding for the small business sector which, incidentally, includes the majority of the country’s private sector, is up for debate. .
Issues of access to finance and favorable terms of financing for small businesses are not new, nor are they unique to Guyana. Even in countries with developed economies, these issues matter to millions of potential entrepreneurs. Here in Guyana, despite a wave of broad economic reforms, access to finance for small businesses remains a major constraint on the growth of the sector. In fact, traditional lending institutions consider small businesses and small businesses inherently risky. Many of these businesses operate in informal sectors and their owners are often considered to lack business acumen. Their perceived shortcomings include the absence of information relating to the preparation of detailed financial statements and business plans, among other weaknesses. These types of business owners may also experience difficulties in providing sufficient collateral to affect meaningful lending.