It is one of the most ambitious projects that the Caribbean Development Bank’s (CDB) Micro, Small and Medium-sized Enterprises (MSME) Unit has supported, and its success is expected to dramatically alter how MSMEs are perceived in the marketplace.

The government of Barbados, through the Ministry of Energy and Business is partnering with the Barbados Stock Exchange (BSE) and the Barbados Small Business Association (SBA) to help transform a group of promising small businesses into investment ready enterprises for the local securities market.

The MSME Unit of the CDB’s Private Sector Division has pledged USD 350,000 to support the initiative dubbed Promoting Access to Equity Financing to Small and Medium-Sized Enterprises Through the Innovation and Growth Market of the Barbados Stock Exchange.

Small businesses have been dogged by perceptions about their risk when compared to those with larger corporate structures and reserves to provide them with the cover they need when there is turbulence in their sector or the general economy.

However, in the Caribbean, small businesses cumulatively are a powerful economic base, producing more than half the employment opportunities in nearly every country in the region and are a driving force of economic activity. Micro and Small businesses also contribute to economic diversity and social cohesion by providing an outlet for the creativity of ambitious young people. This is especially so for women.

Their small size is often a beneficial factor in their ability to be nimble in response to circumstances in the market and can often adjust to the specialised needs of customers.

At the same time, one must concede that small businesses are frequently self-funded in the early stages and they often lack access to capital from traditional sources such as commercial banks and other financial institutions.

Katrina Bradshaw, chief economist in the Ministry of Energy and Business, explained the project was officially launched in March 2023. She noted that the project is advancing. The senior Barbados government official explained the ultimate goal is to have at least 20 businesses in the SME sector listed on the Innovation and Growth Market of the BSE.

How is this bold project expected to unfold? Bradshaw stated interested companies will be taken through the process of determining the enterprises’ state of readiness and their capacity to list on the market.

“From that pool we expect to be in a position to identify at least 20 enterprises that will then be taken through the full process and to develop prospectuses, to be able to pitch to investors, and to be listed on the junior market,” she detailed.

In this process the CDB’s Caribbean Technological Consultancy Services (CTCS) which mobilises knowledge and skills from multiple stakeholders including national and regional institutions to provide technical assistance, will play a central role. They will collaborate with the BSE and the Small Business Association, headed by CEO Dr Lynette Holder.

The project is divided into three phases. The first is the sensitisation and education process. The second phase centres around capacity building of the selected enterprises, and the third phase is the process of listing the companies on the Junior Market making them available to equity investors.

Marlon Yarde, Managing Director of the BSE stressed the commitment of the Stock Exchange to see the project through to fruition with companies that are truly investor ready, while expanding the portfolio of investment offerings.

Dr Holder, a champion of the initiative, is eager to have an aggressive rollout of the project this year. “The project has tremendous potential for the SME sector because it allows for SMEs to access equity financing and provide and instrument for ordinary Barbadians to invest,” the SBA chief executive noted.

She argues that with more than $12 billion in financial institutions owned by ordinary citizens and corporate entities, there is need to unlock a percentage of that to help with the development of SMEs.

It is important to note that some of the world’s largest companies began as small businesses in which investors saw their potential for growth. Some of those are currently global brands such as Meta, YouTube, Spanx and Ben & Jerry’s.

Bradshaw is confident that the current project offers a great deal of potential for SMEs and the investing public. “We in the Ministry are about business – from small to large businesses and creating an enabling environment for all of them to function well and grow and to make a meaningful contribution to the economy."