KINGSTON, Jamaica — Executives from Scotiabank during a recent ScotiaLIVE session encouraged small and medium-sized enterprises (SMEs) to start playing a more active role in their own business development.

The bank said that while SMEs are important drivers of economic growth and development in Jamaica, many continue to face challenges that hinder their growth and development.

During the session, the executives were joined by a member of the SME community to explore and respond to what some business owners may describe as the frustrations and challenges of doing business in Jamaica.

According to both Shamair Bramwell, acting branch manager at Scotiabank Port Antonio, and Rohan Scott, managing director at Kestrel Industries Limited, the challenges facing SMEs in Jamaica are numerous and both internal and external to their operations.

“The high prevalence of business informality among Jamaican SMEs poses a major challenge to the growth of the sector. These informal operations are therefore operating outside of formal systems and thereby, face many restrictions in carrying out certain business activities,” Bramwell said.

According to the senior Scotiabanker, one common issue frequently encountered by the bank is that some entrepreneurs start their business as a means of gaining supplemental income and as such, funds are channelled using a personal account.

“Because of the convenience, they continue to use that account to operate their business. This poses a significant problem when these entrepreneurs come to seek financing,” Bramwell shared.

The bank noted that several programmes and services designed to provide relief  for entrepreneurs experiencing challenges with the financial management of their operations, including online banking, which allows SMEs to set up their payroll, pay suppliers and make other payments online.

For Scott, based on his experience as an entrepreneur, inadequate business planning and the lack of certain critical operational capacities is another factor that affects the ability of SMEs to secure support for the growth of their organisations.

“Often, a business plan is more beneficial to the entrepreneur doing it, than to the organisation that is requesting it. Preparing your business plan sends you on a journey of exploration. You look at the industry, your competitors, the viability of the product and the company. At the end of the day, you should be able to answer your own questions,” Scott said.

He lamented, however, there are also barriers to formalisation that further contribute to their high level of informality. These barriers include “excessive regulatory and administrative procedures, fees and financial requirements as well as challenges with marketing their goods and services, both locally and internationally,” Scott said.

Both presenters concluded that SMEs also need to understand that they should provide transparency in business practices, be compliant, and move out of the informal economy in order to achieve growth.

“When SMEs grow, we are creating overall employment and growth for the country. When people get jobs and earn money, then we are all better off,” Scott said.

Currently, Scotiabank provides SME capacity-building programmes like the Scotiabank Vision Achiever programme, which are designed to provide coaching for entrepreneurs.