World Bank Official Urges Changes to Lending Rules for Micro and Small Businesses

World Bank Alternate Executive Director for Canada, Ireland and the Caribbean Chris Sinckler has recommended changes to lending rules for micro and small businesses, declaring as an injustice the difficulties they experience in accessing adequate finance.

He called for a national conversation on funding access for micro, small and medium-sized enterprises (MSMEs), and suggested that financial institutions should seek to “match the Government” on loan initiatives.

“So, if the Government is putting up $30 million, you put $30 million too. Imagine what that could do to create jobs, to create opportunities and push innovation, to fight poverty in our society. We can no longer shrink back from these big important questions, and I urge you to push forward,” Sinckler told those attending the Small Business Association (SBA) 8th Leo Leacock Memorial Lecture at the Errol Barrow Centre for Creative Imagination at the University of the West Indies (UWI) on Tuesday night.

The lecture was part of Small Business Week 2023.

Speaking on the topic, The Role of Small Firms in the Development Agenda for Small Island Developing States, Sinckler expressed concern that MSMEs were unable to access adequate finance to help them grow, despite small island developing states, including Barbados, having one of the most liquid banking and financial sectors.

The former Minister of Finance and Economic Affairs under the Freundel Stuart administration from 2010 to 2018 said he was well aware of the credential rules and regulatory and legislative issues that banks, credit unions and other lending institutions faced.

He questioned whether the time had not come for “a serious conversation” on the matter, as he indicated that small, black-owned business people in small island developing states continued to “fish around, beg around and plead around with institutions, some of which are foreign [owned]”.

“We have to go and ask them for money, but our sectors that we built, that we own, that manage our resources, are hemmed in by credential rules, legislations and policies and everything to keep them in an estrangement away from you,” argued Sinckler.

“I am saying, tonight, that is a fundamental injustice . . . . Let’s have inverse reparations where small and medium-sized businesses are able to access these resources…. We need a big transformative attempt.”

Sinckler indicated that the MSME sector was responsible for creating numerous jobs and generating the greatest level of economic activity in small island developing countries.