Micro, Small, and Medium-sized Enterprises (MSMEs) in the Region should be strengthened by the implementation of new policy initiatives including regulatory and tax reforms and greater access to finance, a Caribbean Development Bank (CDB) sponsored study is proposing. The study, Micro, Small and Medium Enterprise Development in the Caribbean: Towards A New Frontier, assesses the status of MSMEs in eight of CDB' borrowing member countries (BMCs) - Antigua and Barbuda, Barbados, Belize, Guyana, Jamaica, Trinidad and Tobago, St. Lucia and Suriname. It also examines the challenges facing the sector and proposed a structured approach to addressing these problems. It is also proposed that an MSME Development Strategy adopt a three-tiered approach as was done in Singapore, Korea, Western Europe and Costa Rica over the past two decades. The three tiers are: Support - with a focus on productivity and improvement in product quality to improve competitiveness; Strengthen and Modernise the effectiveness and organisations which provide developmental and other services to the sector; Formulating enabling polices, legislation and strategies through which a business-friendly environment to MSMEs can be improved. The study recommends that, given the absence of a standard definition across the Caribbean, in order to facilitate consistency in the registration and analysis of MSMEs as a distinct growth sector, microenterprises should be classified as those with one to five employees; small enterprises as those with six to 15 employees and medium enterprises as those with 16-50 employees. there should also be a regionally interconnected Registration Network of Intellectual Property and Companies with the capacity for accepting online registrations. This would help to speed up the pace of MSME formalisation and would also help to inform policy at the national and regional levels while enabling regional initiatives for sector development and improving the region' 'Global Competitiveness' and 'Doing Business' rankings. a specialised unit should be established within the state agency or ministry responsible for MSME development to conduct on-going sector research. BMCs should attempt to estimate each year, the contribution of the MSME sector to GDP, specific sectors, employment, and foreign exchange earnings. This would allow the region to establish the economic impact and benefits of the MSME sector and to inform new and modified policy Access to finance and how enterprises managed their businesses are among other areas highlighted in the study. The study proposes that training programmes should be developed with the aim of enhancing the capacity of MSMEs to improve their operations in line with the information needs of their financiers. “This is the main challenge that MSMEs face - the capacity to demonstrate that management of their businesses and resources are 'information based' and that they have institutionalised such approaches to running their operations on a day-to-day basis." The study proposes that Governments should also expand the range of financial products offered to MSMEs in the BMCs along similar lines to those offered to similar enterprises by OECD countries. This could be achieved by accessing and re-deploying under-tapped institutional funds such as the National Insurance Scheme (NIS) and the proposed Dormant Account Scheme in Jamaica, for example. “Apart from inadequate financial management literacy, MSMEs have limited collateral. This is another of the major reasons they experience difficulty in accessing loans from the financial system," the study notes. Another proposal is that tax reforms be introduced to allow formal MSMEs to retain a larger share of their profits and cash flows. The study notes, however, that while increased cash flows would improve MSME attractiveness to local financiers, such reforms may be more difficult in some countries than in others, partly because of the stringent fiscal positions that many Caribbean countries currently face. Nonetheless more focus should be placed on tax reforms that shift the burden of taxation away from direct taxes to indirect taxes and deliberately lower the tax rates for MSMEs. “This would improve MSME 'formality' and reduce administrative inefficiency of the tax system generally," the study said. Labour reform allowing MSMEs greater flexibility in terms of hiring and firing labour is cited as critical as this was found to be the second most important reason informality thrives in the Caribbean private sector. The study also proposes that regulatory reforms allowing Accredited Financial Institutions (AFIs) and Microfinance Institutions (MFIs) to take deposits and offer an expanded range of financial products to their MSME clients need to be implemented. This could strengthen such institutions and allow them to be more creative in providing access to finance. The study recommends that Governments encourage a culture of entrepreneurship through education reform, proposing a new Entrepreneurial Studies syllabus to include modules on ICT, Financial Literacy, Marketing, Management, Accounting and Innovation. The authors also note that a shift to Business Management should address the skills gaps in Tourism and Hospitality, Agricultural Science, Financial Services and Co-operatives at the supervisory, technical and managerial levels. “Renewed emphasis on attracting more students to the vocational trades is also vital in view of the shortage of these skills in the Construction and other industries." At the same time, the study recommended that regional business development policy should deliberately encourage Public-Private Partnerships (PPPs) and more private sector service providers (professionals, firms and associations/BSOs) to sell affordable capacity building services to a larger proportion of businesses. The study said shared resources and services, amalgamations and mergers, where suitable, with other like-minded but strategic organisations, will increase their sustainability.