SMALL business is an endangered species in Trinidad and Tobago.
The number of Small and Medium-Sized Enterprises (SME) is now estimated at less than two-thirds of what existed before the Covid-19 shutdown.
And the number is ever-dwindling, as a result of the declining economy, the crime crisis, difficulty in obtaining foreign exchange, delay in receiving Value Added Tax (VAT) refunds, and encroachment of big business into their fields.
All of that amounts to higher unemployment, displacement of the middle class, and reduced innovation and community activities.
Small businesses are crucial in stimulating economic growth and increasing consumer spending.
They boost competition, encourage entrepreneurship, become involved in district pursuits, and develop skills.
Before the medical crisis, Trinidad and Tobago had an estimated 20,000 SMEs, which were about 85 per cent of all business enterprises.
They employed more than 200,000 workers and contributed 35 per cent of the Gross Domestic Product.
The Covid-19 closure put thousands out of business.
The Government promised that commercial banks would assist SMEs through soft-interest loans, increased overdrafts, and other measures, including payroll support.
The Central Bank said that financial institutions provided loan deferral assistance, waiver of penalty fees, and other forms of aid.
They were “targeted and clear interventions to safeguard the financial welfare of individuals and businesses.”
But the reality was different, with banks generally rescheduling customers’ debts instead of providing meaningful assistance.
T&T’s commercial banks recorded higher profits during the Covid-19 period, quite possibly the only financial institutions in the world to do so.
The Administration of Dr. Keith Rowley did not instruct the banks to create a softer landing for SMEs, in the way that the governments of Britain and other countries did.
The financial pressure meant that many small businesses were unable to keep faith with their suppliers, pay rent or mortgage for their premises, and retain their workers.
In addition to banks, several large businesses reported healthier bottom lines.
One conglomerate expanded its retail division, venturing into fields that were the preserve of small businesses.
That corporation is now selling prepared meals, thus directly competing with small mom-and-pop operators.
Butchers shops, bakeries, stationery shops, alcohol stores, eyewear operations, plant retail, vegetable marts, and other small business-type operations are also now available.
With economies of scale, big businesses could generally afford to sell cheaper, which is another direct body blow to SMEs.
The inequitable distribution of scarce foreign exchange has led some businesses to patronise the black market, passing on the increased cost to consumers.
The situation would likely worsen with the move by Republic Bank to halve the sum available on credit cards.
The tardiness in issuing VAT refunds has also left many small businesses struggling.
In fact, even business magnate Arthur Lok Jack has termed the slow repayments a “body blow” to manufacturers.
Finance Minister Colm Imbert has admitted: “In some instances, $100,000 is make-or-break for a business in terms of VAT refunds.”
Imbert said: “I am painfully aware of the problem of delayed VAT refunds and how it affects small businesses in particular.”
But that is little comfort to SMEs, which are fending financial woes from each side, including the cost of security services in the midst of the crime emergency.
It all amounts to an insidious war on small business operators, who offer independence and creativity, learning opportunities, personal satisfaction, power, and control.
The small business sector is weakening, largely because of Government policies and official inaction.
There is a quiet and sinister war on SMEs.
