Small Business Association renews call for micro stock exchangeSunday, October 25, 2020
BY ABBION ROBINSON
With the novel coronavirus pandemic severely disrupting the economy and leaving many small business owners uncertain about the future, immediate past president of the Small Business Association (SBA) Hugh Johnson has renewed a call for the establishment of a micro stock market.
Johnson pointed out that the lack of capital is a common cry for micro-entrepreneurs.
“[We want] to be able to have access to equity financing on the micro stock exchange, because you would have seen through the crisis that the Jamaica Stock Exchange (JSE) is still doing well. We would like to have that micro stock market so that we can engage in equitable financing instead of loan financing as it stands now,” he stated, as the Jamaica Chamber of Commerce (JCC) delivered its Business and Consumer Indices third quarter report last Tuesday.
“We are a resilient set of people, we just only need the opportunity and facilitation to be able to move forward in a serious way to capitalise on this tragedy and not to waste a crisis,” he continued, noting that the JSE plays an integral role in the local capital market ecosystem, providing billions of dollars in financing to enhance the productive capacity of the Jamaican economy.
The JCC survey revealed that 62 per cent of businesses reported loss of revenue, loss of staff (17 per cent), and a greater reliance on technology (13 per cent), as the top three changes they have experienced since the outbreak of the virus.
“[The survey] has revealed what we on the ground have been experiencing all along. It's not strange to us that these figures pop out at us because we have been experiencing them on a daily basis,” Johnson stated.
In 2018, 2019, and January this year, then Minister of Industry, Investment, Commerce, Agriculture and Fisheries Audley Shaw had touted the establishment of a micro stock exchange that would target micro, small and medium-sized enterprises (MSMEs) for capitalisation of between $5 million and $50 million.
At the time, Shaw indicated that the establishment of the nano-stock market was under consideration.
Encouraged by the pronouncement, the SBA had underscored to small entrepreneurs the importance of good business principles in moving their businesses forward.
“From the small business perspective, in the last three years, we have been having business training because we were anticipating that by now we would have had the micro stock exchange operating. We had gone ahead trying to help small enterprises to do better business by having good corporate governance structure and proper accounting principles embedded in their operations from early,” Johnson said.
“We still need to do much more of that, but we do see governmental help in enabling agencies like Jamaica Business Development Corporation with the proper resource to be able to do more of that,” Johnson argued.
“Business training is one of the key areas, not so much financing. The last survey I had seen, financing was third on the list, but proper business training was the number one hurdle preventing small operators from scaling up. For over a year now, the Private Sector Organisation of Jamaica had engaged financial institutions, and we have been having dialogue on having a programme to help to bridge that divide. It's long overdue and difficult, but we're working on it and hoping that it will start bearing fruit in the near future,” he said.
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