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MSME Alliance lobbies PM for support on credit, and RE equipment

Saying the issue was as fundamental as their survival, a group of micro and small businesses has collected close to 1,000 signatures on a petition handed to Prime Minister (PM) Bruce Golding pleading for support of the sector.

The MSME Alliance’s list of concerns runs the gamut of the expensive cost of doing business, and how to mitigate impact on companies’ bottom line.

Its list was mostly skewed towards access to credit

and taming energy overheads, including a proposal to implement an energy subsidy financed from dividend payments to the Government on its one-fifth equity stake in the Jamaica Public Service Company (JPS).

The proposal goes even further to suggest that Jamaica “assume ownership of transmission lines”, which are currently the property of the JPS. The utility is owned 40 per cent by Marubeni of Japan, 40 per cent by Taqa of the United Arab Emirates, 19.9 per cent by the Government of Jamaica through the accountant general and the Development Bank of Jamaica, while 0.1 per cent is held by individuals.

But the group is also seeking more duty concessions, the establishment of an agency that can sell “collateral cover” to micro, small and medium-sized enterprises (MSMEs), and a more palatable credit policy that makes it easier for them to access investment capital.

The alliance – whose membership covers 35 business associations that represent some 300,000 businesses – staged a mock funeral for businesses in the MSME sector in August, which it dubbed ‘Bawl Out’, to bring public attention to the concerns.

List of concerns

From that event, and subsequent feedback from businesses, it has put together a 10-point list of concerns, which the group has asked Golding to give some consideration to before returning to the public-private sector Partnership for Transformation Talks.

They met with the PM on September 2, according to a release from the group.

“These signatures represent only a small fraction of the support we have received since our Bawl Out in Portmore Pines,” said Anthony Charley, first vice-president of the MSME Alliance.

“Our members are fighting for survival and we will continue to bawl out until we feel the support from the Government.”

The 10-point list, including sub-points – dubbed by the alliance as a large-scale national risk-management programme for MSMEs — is reproduced on this page.

The group said PM Golding has agreed to hold further discussions with the MSME Alliance on the proposals.

10 Key Proposals:

1. Grants and technical support for training/capacity building and business-support services.

2. Expansion of demand for the goods and services of MSME entrepreneurs through targeted spending of the Constituency Development Fund and other public spending as well as targeted spending of private firms willing to act with corporate responsibility.

3. Establishing investment -lending mechanisms/institutions that would be more responsive to the needs of businesses that have difficulty in securing loans.

4. Pursuing the establishment of a regional collateralising agency with public assets – such as land — that can sell collateral cover, for example, an interest in the land, to MSMEs who lack collateral, at a low monthly cost.

5. A comprehensive public education campaign about the Credit Reporting Bill and its implications for MSMEs accessing financing, and putting regulations in place to ensure that credit history information to be used by financial institutions is not retroactive, but starts accumulating on the effective date when the act comes into force.

6. Widening the category for duty concessions for tax-compliant MSMEs, including MSME member associations;

7. Revisiting GCT zero-rating categories, for example, on machinery, chemicals, fertilisers and feeds.

8. Completing the process of establishing an MSME policy before December 31, 2010.

9. Urgently moving to democratise decision-making to allow for fair representation and refereeing of the competing business interests. Big business interests cannot represent MSME interests.

10. Urgent assistance in addressing high energy costs, including:

a. Immediate grants and technical support to assist our members with energy-conservation solutions, and retrofitting their businesses with alternative energy equipment.

b. Duty-free importation of all energy-saving devices by expanding the range of duty-free concession for alternative energy sources to include all imports of solar equipment and similar green energy solutions as well as peripherals.

c. Independent investigation of the JPS meters by the Bureau of Standards and independent professionals.

d. Use the Government’s 20 per cent minority interest in the JPS to renegotiate the JPS agreement. We suggest that Government assume ownership of the transmission lines to allow multiple generators of electricity, thereby introducing competition in the industry.

e. Use any dividends paid to Government by the JPS to assist MSMEs with energy conservation and energy alternatives.

f. A review of the JPS rate categories in light of the recent reduction in the number of categories by the Office of Utilities Regulation, which has led to some MSMEs paying higher rates, with a view to introducing a special lower-rate category of tax-compliant MSMEs.

g. Income tax breaks for tax-compliant MSMEs using alternative energy sources and energy-conservation devices.

h. Expedite the framework required to implement net metering and wheeling.

i. Make funding available at interest rates and terms that ensure net savings and do not impair cash flow, for example, annual interest rate at 8.0 per cent for 15 years.

Source: Jamaica Gleaner

Category/ies:Jamaica News.
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