Hylton laments stall in implementation of MSME Entrepreneurial PolicyFriday, July 10, 2020
KINGSTON, Jamaica — Opposition spokesperson on industry, competitiveness and global logistics Anthony Hylton is lamenting the snail's pace approach to the Micro, Small and Medium Enterprise (MSME) Entrepreneurial Policy that was crafted and adopted in 2013 under his leadership as then minister of industry, investment and commerce.
Hylton, in his recent Sectoral Debate presentation, noted that the Policy today serves as a comprehensive framework for the implementation of strategies to support the growth and development of the MSME sector.
He said that since the adoption of the first policy and its amendment, nothing else has been done to move the project forward.
“The failure of the implementation of the policy has meant that with the partial lockdown due to the COVID-19 crisis, some 700,000 Jamaicans who earned the national minimum wage of $7,200 per week or just above that were left with no or reduced income for almost three months. Many of them worked for small or medium-sized businesses, in homes, or were micro-entrepreneurs themselves,” Hylton said.
He explained that projections of a further 12-14 per cent contraction in the economy, by the Planning Institute of Jamaica, have likely taken into account continued unemployment forecast and further negative impact on MSMEs.
Hylton said the small business sector, even under the Small Business Grant and COVID-19 General Grant (for hairdressers, bartenders, barbers, taxi operators, etc.), was placed under unnecessary distress with various requirements of licenses and bank accounts, which automatically disqualified too many from the benefit.
“I have seen the available evidence which shows consistently that approximately 41 per cent of the economy is informal, which means that most of them do not even deal with formal banks or pay taxes (except maybe general Consumption Tax [GCT]). The question arises, as to what data sets did the Government rely on in designing the relief for the small business operators? Could it have been done more effectively?” the Shadow Minister asked.
Hylton said that it has served to further highlight, the credit transmission problem, which has dogged the economy for quite some time and speaks to the fact that funds made available to the MSME sector, under various schemes, are not getting to the sector due largely to the informality of the sector. He also noted that consequently, the flow of funds and the impact is limited.
“It means that different channels have to be found, through which to flow the funds, with the appropriate safeguards.”
Hylton also suggested that the funds could be channeled through the Microfinance Institutions (at lower interest rates) and the Social Development Commission (SDC) Officers assigned to communities island wide, with simple, but verifiable eligibility criteria.
“A National Identification system is a part of the solution, but until the right system is put in place these suggested approaches should be examined,” he said.
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