–providing finance to young entrepreneurs
–making access to loans easier

COGNISANT of the unemployment rate among the youth population, the Ministry of Tourism, Industry and Commerce has embarked upon a path to promote entrepreneurship in this section of society by providing access to financing for the development of small businesses.

Director of Business and Entrepreneur Development attached to the Ministry of Tourism, Industry and Commerce, John Edghill, during an interview with the Sunday Chronicle, pronounced on a gamut of measures the ministry is currently facilitating to implement and support entrepreneurship.

“The reason why the ministry is pushing entrepreneurship is because we actually realise that there is an issue with unemployment with young people. In Guyana, I think the rate is actually 30 per cent; and that’s higher than our actual rate of the population, which is around 13 per cent, if I’m not mistaken,” he said.

According to Edghill, the ministry recognises that when most young people depart the school system, they do so without, at least, adequate financing at their disposal, which stymies investment. It is against this backdrop that the Small Business Bureau is using a grant programme to provide up to $500,000 to young entrepreneurs; no strings attached, for business development.

“What the government has through the Small Business Bureau is a grant programme where you can access up to half-a-million dollars; which is quite substantive, if you would just like to have as start-up, or if you would just like some injection into your business,” Edghill said.

Businesses desirous of accessing the grant must submit a comprehensive business plan, demonstrating what particular service the business will provide, the competition within the business industry, and the opportunities conducive to developing the business and industry.

“That grant programme is obviously government’s commitment to you; and that is not money that you need to repay on. So, that is no interest; no repay period. That is just government’s commitment to say, ‘We trust your business enough to generate some economic impact; we want you to be able to nurture and grow your business,’” he said.

‘LEGIT’ AND COMPLIANT
The ministry, however, requires the business to be legitimate and compliant with all requisite procedures. It must be compliant with the Guyana Revenue Authority (GRA), the National Insurance Scheme (NIS), and must be registered at the Commercial Registry.

“The reason for that, naturally, if government is giving you half-a-million dollars, then government must ensure the fund is revolving. The only way the fund can revolve is if a business starts up, is able to grow, and then is able to pay taxes, which will be used to serve other such ventures,” Edghill said.

“That is why that particular caveat is there; it is not intended to cause any undue burden on a business owner, but it is intended so that other business owners can benefit, because we don’t just want a one-year programme of giving grants,” he added.
Edghill explained that the grant has been ongoing for at least eight years, and has been fully financed by the government. He highlighted that under the previous administration, some $100 million was allocated to the fund, however, for the first full year of the new government, some $250 million was allocated to support and expand it, thereby allowing it to support more businesses.

Edghill explained that the feedback to the initiative has been “overwhelming”, as there is a high demand by businesses to access the grant. He disclosed that the ministry is on path to reach its target of providing access to funding for 700 businesses, and is even expected to surpass their target for the year.

Coupled with the grant initiative to help businesses evolve, the Ministry of Tourism, Industry and Commerce has also provided training for small businesses in the area of developing business plans.

Edghill highlighted that so far, in Linden, Region Ten (Upper Demerara – Berbice) alone, over 200 entrepreneurs were involved in the business plan training; over 50 per cent were managed by young persons, and some 30 businesses from that region have received grants for the year. This is a significant increase from 2020, when only four grants were disbursed.

MAJOR PLANS
Edghill further disclosed that major plans are in the pipeline to expand access to financing provided by the ministry. One such initiative is the Security Transaction Framework Project, which seeks to get commercial banks and agencies to widely accept movable property as collateral for the granting of loans for small businesses.

“We know usually when you go to commercial banks and you’re seeking a loan, you have to get collateral, and that collateral is usually immovable property in the form of land and building,” Edghill said.

He highlighted that the project has already significantly benefitted young persons in China, Chile, and several parts of Latin America.

A Movable Property Bill is currently being drafted by the Ministry of Tourism, Industry and Commerce to formalise the use of movable property, such as equipment, machinery and vehicles as collateral for loans.

“Let’s say you’re doing agro-processing, and you have grinders that you use to convert fruits into manufactured product, that would be able to be used as collateral for your loan,” Edghill said.

He highlighted that the ministry is currently conducting a national state of entrepreneurship survey, assessing persons who dropped out of school in the Fourth or Sixth Form levels, in the hope of understanding their intentions, ambitions and where they currently are in terms of conducting business.

“We ask them some detailed questions; not difficult, but detailed enough to see whether they are aware of the process of setting up a business; whether the risk of start-up is too high, all with the intention to be able to particularly craft programmes to target young entrepreneurs,” Edghill said.