The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Despite the Bahamas enjoying $1.5 billion in foreign direct investment (FDI) inflows in 2012, a Cabinet Minister yesterday said very little of this had trickled down to small and medium-sized enterprises (SMEs) over the years.

Khaalis Rolle, minister of state for investments, said: “SME’s in the Bahamas for a number of years have faced an uphill battle. Access to capital remains the major issue and barrier to survival when you go through a difficult economy like we’re going through now.

“Sales have fallen off. Most SMEs cannot go to the bank and re-negotiate their facilities simply because they don’t have the capacity to do so.”

Speaking at a press conference announcing the launch of consultation on the Government’s proposed Small and Medium-Sized Business development legislation, Mr Rolle said: “This new Bill is designed to make SME’s more competitive and lower that barrier of access to capital.

“The other barrier that SME’s face is lack of technical support. If you look at all of the institutions that are designed to offer support to SME’s, in many instances you can make the case that for various reasons they are not living up to the expectations. They are not living up to a modern mandate of support for SMEs.

“I think in the past, when we developed those institutions, the mandates were very narrow and didn’t allow flexibility to adjust for the changing times.”

Mr Rolle added: “The Bahamas enjoyed $1.5 billion of foreign direct investment last year, which was the largest among small island developing states. That’s significant for us. If you look at the benefits to SME’s, the downstream benefits were very little.

“You can make the argument that a major challenge that SMEs face is not being fully integrated into the overall economy in a structured way, otherwise they would have benefited in a very big way from all of the foreign direct investment that we received over the years.”

Mr Rolle saidSMEs represent 50 per cent of the country’s economic activity. “If you talk about contribution and importance, 50 per cent is a major contribution,” he added.