THE Government of Trinidad and Tobago has said that it will be modelling the “very successful” blueprint used by the Jamaica Stock Exchange’s (JSE), through its Junior Market, to develop its own small and medium-sized enterprise (SME) market.

The objective to be administered by the Trinidad and Tobago Stock Exchange (TTSE) aims to bring increased formalisation and proper governance structures to foster the growth of SMEs in that country. The SME market was developed as an avenue for small enterprises to raise capital on the local market in order to reduce their reliance on bank financing, and to provide them with alternative sources of accessing capital to expand their businesses. The initiative was also intended to foster the development of the local capital market, deemed an important component in the country’s thrust towards economic diversification.

Speaking at the recent launch of the SME Mentorship Program and SME Market Place, Trinidad’s Finance Minister Colm Imbert noted the successes of the JSE which, he said, through its Junior Market has managed to list near 50 securities — almost similar to that of the Main Market.

The Junior Market of the JSE, launched in 2009, was developed to promote investment in entrepreneurship whilst promoting employment and economic development. Through this market investors are allowed to put capital into legitimate SMEs, creating increased opportunities for growth and access to capital. Following heightened calls for the establishment of a micro stock exchange, the JSE is also now being pushed to offer further support to smaller players in the sector locally.

“We decided to see what was different in Jamaica that we could incorporate here. The key difference was the presence of mentors. In Jamaica, by strategically developing their competencies and acting as a compliance advisor, mentors directly contribute to a company’s growth, innovation, and overall strategy, thus improving customer and investor confidence in the company,” Imbert is quoted as saying in a recent CMC news report.

He went on to note good fiscal discipline — such as the keeping of proper accounts and records, good human resource and industrial relations practices, and compliance with statutory obligations among some key practices which will become necessary.

Citing another major benefit of the JSE model, which is the application of a full income tax holiday for the first five years after listing and a 50 per cent discount for the remaining five years, Imbert said that complementary to the tax incentives and to ease the operational burden of listing, the Government of Trinidad, in collaboration with the central bank and the stock exchange, will also “design a similar mentorship programme that will provide support to the SMEs and close the gaps of insufficient documentation, as well as ensure adherence to compliance and corporate governance standards”.

He said these proposed SME mentorship rules were already published by the TTSE in June of this year and were approved by the Securities and Exchange Commission in August.

“This SME mentorship programme demonstrates the willingness of the TTSE to work with the Government to invest the time and resources necessary to assist companies to operate efficiently on the stock market,” he further said in the report.