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'Micro' is just as important!

JBDC boss says with the buzz now around 'SME'…let us remember its 'MSME'

BY KELLARAY MILES
Business reporter
milesk@jamaicaobserver.com

Wednesday, October 09, 2019

With all the focus on SMEs in recent times and trying to do right by what many deem as a largely underserved sector, the Jamaica Business Development Corporation (JBDC) has pointed out that care should be given in ensuring that we don't leave out the 'micro' component from the micro, small and medium-sized enterprises (MSMEs) during planning and discussions. This, as most of the discourse tends to focus on the small and upward entities.

Valerie Viera, chief executive officer at JBDC, in a sit-down interview with the Jamaica Observer, is of the view that the 'micro' which a lot of people tend to leave out also plays a very vital role in contributing to the larger MSME sector.

“The 'micro' which a lot of people leave out, you hear them say small business and SMEs, and forget that the first 'M' is there. This group, by government definition, has turnovers of up to $15 million and employees of up to five people,” she noted.

She further suggested that one person on a computer can be a substantially sized business, so technology needs to be taken more into account as part of that definition.

According to the Ministry of Industry, Commerce, Agriculture and Fisheries (MICAF), “The MSME sector accounts for 80 per cent of jobs in the Jamaican economy and contributes significantly to GDP, employment and wealth creation, poverty alleviation, female employment and social stability.”

With financial institutions now starting to give greater focus to the MSME sector, the outspoken CEO believes that a strong message was sent to say “micro don't mean 'illiterate, buy-and-sell people who not going anywhere' ”, as was the case previously – as these people are real, viable and potentially profitable entities, which in most cases only require proper development and support.

“There is this concept that if you are micro you not really up to scratch with other small businesses, but micro for JBDC, in particular, in spite of the national definition, is nursery,” Viera shared.

She highlighted that there are some micro-type businesses, such as people with PhDs who have experiments going on which are going to move very fast, however, they are still considered micro because they have just started and need to go through the processes required to get up to the other levels.

She shared with the Business Observer that her company, in treating with this sector and catering to the different segments, has begun to sell the group in stages.

“We're selling it now as a stage in business, so for micro – they're at nursery in the initial phases, after which we will equip them with the necessary training and guidance to bring them up to the other stages, which includes hand-holding and acceleration”, she said.

“We have different levels of service. There are those one-off services where people might come and want their labels and collaterals developed – our design and graphics people will do that. In terms of capacity building, we work with three different levels of clients – level one/tier one we call 'nursery', where you come in with many ideas but we help you to filter out what is feasible and flesh out a practical business plans. These will help with formalising the business, identifying real viable business opportunities, and helping to prepare the infrastructure such as accounts, identifying funding, i.e. loans,” she explained.

She further explained that tier 2 or hand-holding is where they stay with a client for about 18 months to take them through that process of really expanding and putting roots in the ground. While tier 3 or 'accelerators' is for those people who have reached a stage where they have the opportunity to scale up.

The JBDC, which is an agency of government mandated to give support to this sector, has recently signed three additional memoranda of understanding with partnering institutions, namely: the University of Technology (UTech), Edna Manley College of the Visual and Performing Arts and College of Agriculture, Science & Education (CASE), to secure locations for their small business development centres (SBDCs).

According to Viera “these SBDCs will provide business support services and training to budding businesses and those already in business but want to scale up”.