Challenges Facing Barbados' MSME Sector Highlighted in New Survey

Micro, Small And Medium Enterprises (MSMEs) remain central to Barbados’ economy, but they are operating under persistent constraints that have changed little over the last ten years.

Furthermore, unless MSMEs receive targeted financing support to build resilience while maintaining operational viability, existing vulnerabilities at the firm level may translate into broader systemic risks for the economy.

These are findings of The State Of Small Business In Barbados, a national survey of the MSME sector, which was commissioned by the Small Business Association (SBA), funded by the Inter-American Development Bank (IDB), with Professor Dwayne Devonish of the University of the West Indies (UWI) the lead researcher.

The research, which is the first of its kind carried out since 2016, and is based on a 2025 survey and insights from MSME operators, concluded that “the current configuration of the sector does not yet position the country for sustained expansion, export competitiveness, or economic resilience”.

The findings of the study included:

Without targeted and coordinated policy intervention, the MSME sector will continue to function as a survival-based ecosystem rather than a growth-oriented engine of development.

Services’ relatively low export intensity constrains foreign exchange earnings and limits the sector’s contribution to external balance.

While female participation has increased and aggregate revenue has grown, scaling, productivity, export depth, and resilience remain limited.

Agriculture and manufacturing remain under represented in both employment and enterprise scale.

Improving access to finance, specifically for working capital and early-stage expansion, is essential to enable firms to scale.

Financial constraints within the MSME sector pose a significant risk to climate resilience, as firms lack the resources to invest in adaptation and risk mitigation measures.

“Addressing all aforementioned challenges will require coordinated, size- and sector-sensitive policies that go beyond entry support to actively enable firm growth, resilience, and long-term competitiveness,” the report stated.

Devonish, who is director of The School for Graduate Studies and Research at UWI’s Cave Hill Campus, said in the publication that “the findings highlight a sector that is both vital and resilient but severely constrained”.

“While MSMEs continue to demonstrate adaptability, particularly in the aftermath of COVID-19, persistent structural challenges remain,” he reported.