The positive impact of micro, small and medium-sized enterprises (MSMEs) on the gross domestic product (GDP), employment, social cohesion, and quality of life for women and marginalised groups, is too significant for the Caribbean Development Bank (CDB) not to continue its focus on this sector.

This is the assessment of Lisa Harding, Coordinator of MSME Development at the CDB as she outlined the development institution’s plan of action  for the sector.

As was the case in 2020, again in 2021, and at the start of 2022, economic activity continues to be overshadowed by the COVID-19 pandemic. However, Harding acknowledged that despite the challenging conditions, most of the bank’s grantees and beneficiaries successfully navigated the pandemic, learning key lessons in adaptation.

“Many MSMEs have had to pivot, as well as institutions, and they’ve done so seamlessly. There were others who required a little more support, but the intent and the willingness were quite evident,” Harding disclosed.

Though they were not completely surprised, the CDB officials reported that many small and micro enterprises emerged from the depths of the pandemic, while some managed to create spaces for their businesses to expand.

This, they noted, was evidenced in the level of innovation, adaptation and flexibility which MSMEs demonstrated in response to the harsh conditions that upended lives and livelihoods across the CDB’s 19 Borrowing Member Countries (BMCs).

It is not hyperbole to suggest that a new calibre of entrepreneur developed from the pandemic environment, Harding suggested.  She described those who survived the health crisis and its resultant economic shock, as “creative”, “focused  and visionary”.

Malene Joseph, Consulting Project Coordinator of the Bank’s Cultural and Creative Industries Innovation Fund (CIIF), conceded this segment of the MSME sector “took a really hard knock”, but even these grantees sought to find solutions, and worked with CDB’s CIIF to “redesign and restructure their businesses where possible”.

She added: “In each context, there were different challenges that required a collaborative approach to understanding and responding.”

In this connection, she highlighted the CIIF team’s reliance on the Community of Practice approach, a system that celebrates learning and capacity development that are community-led.

The post-pandemic world for MSMEs in the Caribbean requires speedy transformation which the Coordinator of MSME Development asserts CDB is well positioned and sufficiently resourced to assist enterprises in achieving.

To strengthen the position of MSMEs in the current realities, CDB is committed to continued sensitisation of the sector on issues such as intellectual property (IP). One such project of which the unit is very proud, was in conjunction with the Jamaica Intellectual Property Office (JAIPO). This involved strengthening the capacity of financial institutions to understand what constitutes IP, how it is monetised and collateralised and help them to respond adequately to the financing needs of MSMEs including those in the creative and cultural industries.

“There will be no lessening of CDB’s commitment to MSMEs. In fact, our President Dr Hyginus “Gene” Leon has signalled the bank’s emphasis on private sector development,  and additional resources will also be provided to shore up the lending components that include lines of credit. This will also redound to the benefit of MSMEs.”

Harding emphasised: “MSMEs account for up to 70 per cent of employment across the Region. The statistics tell the story of the importance of this sector. Without MSMEs functioning, we can only imagine the impact this would have on GDP, employment, crime, social cohesion and the incidence of poverty.”

Moreover, Harding advised of CDB’s focus to promote upscaling of small and medium-sized enterprises which have the potential to generate foreign exchange and increase the level of employment.

There are, however, some specific areas where Harding noted the MSME Unit wants to focus its attention. Acknowledging the impact of the pandemic on the sector, she asserted that  “building back better” will be key.

Ensuring that MSMEs are structuring resiliency into their business plans will also be a priority. How will that be achieved? Harding said innovation is a critical component of becoming more resilient.

“Not enough of our MSMEs are adopting technologies to help them improve their products, services, and processes and this is resulting in a greater digital divide in the Region and impacting on our competitiveness.”

In addition, the MSME Unit will be concentrating on sustainable business practices in the sector.

“We want to see MSMEs incorporating more sustainable business practices in their operations – not as an add-on but in the design. We want them to incorporate ways of going green, and increased recycling.

“What the pandemic has taught us is that MSMEs need to remain flexible and to incorporate that into their design. We at the CDB, as an institution will also need to ensure we too, remain flexible to cater to the needs of our constituents,” Harding stated.