Copyright trinidadexpress
Several business chambers across Trinidad and Tobago have voiced concern over the government’s decision to discontinue the small to medium enterprise long-term guarantee loan programme, warning that the move could limit access to financing, discourage entrepreneurship, and slow the pace of economic recovery. The programme, introduced to assist SMEs in accessing credit for expansion and recovery following the pandemic and supply chain disruptions, had provided a financial safety net for qualifying businesses. Finance Minister Davendranath Tancoo announced that the Government had scrapped the $500 million programme introduced in 2022 to help non-energy sector businesses access financing during a Standing Finance Committee session last week. Fyzabad Chamber of Commerce President of the Fyzabad Chamber of Commerce Angie Jairam said the withdrawal of the SME Long-Term Guarantee Loan Programme “can certainly have implications for small and medium enterprises that continue to face liquidity and financing challenges”. In an interview with Express Business, she noted that for many businesses that qualified, this facility offered a vital safety net, enabling access to much-needed capital for expansion, retooling, or recovery after the pandemic. She warned that the removal could make it harder for SMEs without strong collateral or a long financial history to access affordable credit. Jairam said while Tancoo indicated that the programme was undersubscribed, she suggested this may be partly due to “the high level of informality that still exists within the SME sector in T&T”. “Many small operators remain unregistered or lack the proper financial documentation needed to access formal financing. This highlights the importance of encouraging businesses to formalise their operations so they can fully benefit from government policies and financial support programmes designed to promote growth and sustainability,” she said. She supported the Minister’s intention to reach out to SMEs “via initiatives that they are inclined to accept” but stressed that formalisation is key to unlocking opportunities for survival and expansion, and to building a more resilient and competitive business community. Jairam further urged the Government to continue developing mechanisms that make financing more accessible to SMEs, including enhanced credit guarantee systems, interest support, and partnerships with credit unions and micro-finance institutions to create easier access points for small businesses often overlooked by traditional banks. She proposed several supporting measures, • Low-interest revolving loan funding targeted to SMEs, especially in manufacturing, agro-processing, and digital services. • Simplified tax and compliance processes. • Grants and training to help SMEs adopt e-commerce and productivity-enhancing technologies. • A Digital Skills Accelerator Programme in collaboration with chambers and business associations to upskill owners and staff. • Incentives for business formalisation, such as small grants, NIS support for sole traders, and simplified business registration. • Expansion of eTecK parks and community business hubs in rural and underserved areas. “The government has an important role to play in helping SMEs strengthen their financial resilience. However, SMEs, especially within the informal sector, must also do their part to prepare themselves to take advantage of opportunities to strengthen the business sector and the country’s economy,” said Jairam. She called for a structured and inclusive SME policy framework, supported by accessible finance, skills development, and digital transformation as she believes it “will be essential for achieving sustainable growth and national economic diversification in T&T”. Greater San Fernando Area Chamber of Commerce The Greater San Fernando Area Chamber of Commerce president Kiran Singh warned that the withdrawal of the SME Guarantee Loan Programme could discourage entrepreneurship and investment in the SME sector. “The guarantee programme made credit more accessible to those in the MSME sector. Its withdrawal risks undermining that confidence. New entrepreneurs may have to seek alternative funding mechanisms, which could be counterproductive to national efforts to stimulate private sector growth, job sustainability and creation,” he said in a WhatsApp exchange. If the government intends to discontinue the current programme, Singh urged that it be replaced with alternative mechanisms to sustain SME growth. He also proposed options such as a revised and more targeted guarantee system, interest rate subsidies for banks and credit unions that lend to SMEs in priority sectors, or a co-funded SME Development Fund focused on innovation, digital transformation, and export readiness. He also emphasised that any financial support should be paired with capacity-building initiatives “to equip entrepreneurs with stronger financial management and strategic planning skills”. Chaguanas Chamber of Industry and Commerce The Chaguanas Chamber president Baldath Maharaj urged caution, noting the facility’s significant role in supporting small and medium-sized enterprises. “We appreciate the Minister’s continuous drive toward efficiency and the difficult decisions necessary for national economic sustainability. However, we must respectfully highlight the crucial role this facility plays for our small and medium-sized enterprises,” said Maharaj in response to questions from Express Business. He warned that the sudden removal of the programme, without clear guidance on a replacement, “risks causing a contraction in capital flow, leading to stricter lending terms”. “The guarantee programme served as a vital risk-sharing bridge between commercial banks and SMEs that possess strong business models but may lack significant hard collateral,” Maharaj noted. He added that the programme had supported business confidence and stability in Central Trinidad, allowing members to invest, modernise operations, and sustain employment. “To maintain and even increase the current level of business, we believe the spirit of supportive financing must be preserved,” he said. Maharaj proposed that Government consider implementing a “modernised, permanent Partial Credit Guarantee Scheme” involving structured risk-sharing with the private sector, alongside enhanced, targeted support for business development and digital transformation. “We look forward to engaging with the Ministry of Finance to ensure any transition in policy is smooth, well-communicated, and provides our essential SME sector with continuous, reliable access to the financing it needs to thrive,” noted Maharaj. Couva/Point Lisas Chamber of Commerce President of the Couva/Point Lisas Chamber of Commerce Deoraj Mahase said from the information provided, “it seems that many SMEs have not utilised the facility and therefore, that being the case the impact should be minimal”. “Additionally, the Minister did indicate that measures would be taken to reach out to businesses to address their needs which will have a positive impact for those businesses,” he said in response to questions from Express Business. He added that he does not believe the scrapping of this scheme will discourage entrepreneurship as he reiterated the Government’s plans to introduce new measures to assist the business community. Former finance minister Colm Imbert introduced this initiative in the 2023 budget presentation. He said the government would fund a new long-term loan guarantee scheme for SMEs and the project will be managed by First Citizens Bank, in collaboration with other commercial banks. “We are funding $500 million in partnership with commercial banks, a new long-term loan guarantee scheme for SMEs. The government guarantee will be up to 80 per cent of the value of the loans for up to ten years, inclusive of a two-year moratorium on repayments, and will focus on the non-energy sector,” said Imbert.
