SMALL BUSI­NESS GRANTS

Im­prove lives of 28,265: Ali

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Sha­heen Ali says the Gov­ern­ment Mi­cro and Small Busi­ness Grant (MSBG) Fa­cil­ity has had a pos­i­tive di­rect im­pact on 5853 Fi­jians. The Per­ma­nent Sec­re­tary for In­dus­try, Trade and Tourism said as a re­sult the grant in­di­rectly im­proved the lives of 29,265 peo­ple. He de­liv­ered a min­istry sub­mis­sion be­fore the Pub­lic Ac­counts Com­mit­tee. He was re­spond­ing to the meet­ing of PAC with the Fiji De­vel­op­ment Bank, which had led to neg­a­tive re­ports in the media on the grant. Mr Ali ex­plained the rea­sons for the Gov­ern­ment’s fo­cus on mi­cro and small busi­ness sec­tor. “The mi­cro, small and medium en­ter­prise sec­tor rep­re­sents ap­prox­i­mately 18 per cent of the Fi­jian GDP,” he said. “It should be noted that be­cause a large ma­jor­ity of this sec­tor op­er­ates as in­for­mal busi­nesses. There­fore, this con­tri­bu­tion is an un­der­es­ti­mate of the real con­tri­bu­tion of the MSME sec­tor to the econ­omy.

“It has been glob­ally proven that the MSME sec­tor can help build a re­silient and ro­bust econ­omy. It cre­ates the foun­da­tion for strong na­tions, na­tions that are able to with­stand ex­ter­nal shocks. Coun­tries, such as, Malaysia, Thai­land, In­done­sia, to name a few are ex­am­ples of economies that have been built on the MSME sec­tor. “Ad­di­tion­ally, the MSME sec­tor is the cat­a­lyst for in­no­va­tion. There­fore, the Fi­jian Gov­ern­ment has ini­ti­ated a num­ber of projects and ini­tia­tives to har­ness the full po­ten­tial of the MSME sec­tor, which in­clude:

Na­tional Ex­port Strat­egy – fo­cus on small and medium en­ter­prises that are ex­port­ing;

Fi­jian Made-Buy Fi­jian Cam­paign – 176 Fi­jian crafters li­censed un­der the cam­paign

Co-op­er­a­tives de­vel­op­ment and train­ing;

In­te­grated Hu­man Re­source De­vel­op­ment Pro­gramme;

North­ern De­vel­op­ment Pro­gramme;

Na­tional Cen­tre for Small and Mi­cro En­ter­prises – which pro­vides train­ing, men­tor­ing;

“In ad­di­tion to the above ini­tia­tives, in 2015 the Mi­cro and Small Busi­ness Grant Fa­cil­ity was launched. The Fa­cil­ity was to pro­vide $1000 grants to mi­cro and small en­trepreneurs who were not able to ob­tain fi­nance from banks or other fi­nan­cial in­sti­tu­tions. “Why mi­cro grants and not loans, a num­ber of peo­ple would ask.

“Loans are dif­fi­cult for a mi­cro and small busi­ness to se­cure. And in the event they do se­cure loans, it can lead to in­debt­ed­ness, hos­tile pay­ments col­lec­tors and in­flex­i­ble re­pay­ment sched­ules. Fur­ther­more, hav­ing a debt con­straints the abil­ity of a mi­cro and small busi­ness to grad­u­ate to the next level.

“Grants, un­like loans, can cre­ate independence and cul­ti­vate sus­tain­able de­vel­op­ment in a com­mu­nity. A grant cre­ates spa­ces for pos­i­tive re­la­tion­ships and an em­pow­ered in­di­vid­ual. “Cur­rently, a num­ber of NGOs and other pri­vate sec­tor or­gan­i­sa­tions re­ceive grants, how­ever, there is no con­cerns raised on the ac­count­abil­ity of the grant re­cip­i­ents. When it comes to in­di­vid­u­als who are in need of the sup­port ques­tions are raised on the cred­i­bil­ity of the project. “The MSBG aims to em­power the mi­cro and small en­tre­pre­neur, who were not able to get ac­cess to fi­nance from com­mer­cial fi­nan­cial in­sti­tu­tions. “To re­duce poverty and gen­er­ate ad­di­tional in­come. To cre­ate value chains and link to sup­pli­ers and markets. “The MSBG is open to all mi­cro and small busi­nesses in Fiji. These are busi­nesses with turnover less than $30,000 and em­ploy­ing not more than 5 in­di­vid­u­als.

“As stated ear­lier the tar­get was to gen­er­ate eco­nomic ac­tiv­ity at the grass­root level and also to em­power young Fi­jians and women. Ru­ral com­mu­ni­ties – 70 per cent Women – 37 per cent Youth is - Young pop­u­la­tion 45 per cent un­der the age of 25 years and 60 per cent un­der the age of 40 years “The in­tended im­pact of the MSBG is to pro­vide mi­cro and small busi­nesses the op­por­tu­nity to be­come sus­tain­able and grow into suc­cess­ful busi­nesses. It also al­lows for the main­stream­ing of the in­for­mal sec­tor into the for­mal econ­omy. “Through sus­tain­able liveli­hood the pro­gramme also en­ables bet­ter so­cio-eco­nomic con­di­tions, such as ed­u­ca­tion, im­proved hous­ing, wa­ter and san­i­ta­tion, to name a few. “The MSBG is open to all mi­cro and small busi­nesses in Fiji. These are busi­nesses with turnover less than $30,000 and em­ploy­ing not more than 5 in­di­vid­u­als. There is a rat­ing sys­tem, that has been de­vel­oped in con­junc­tion with Fiji De­vel­op­ment Bank (FDB), to as­sess ap­pli­ca­tions and scores are awarded on the doc­u­men­ta­tion and in­for­ma­tion pro­vided on project vi­a­bil­ity, com­pe­ti­tion and man­age­ment skills.

“In order to qual­ify the ap­pli­cants need to score at least 28 out of 50. The final ap­proval is de­pend­ing on the re­sult of the val­i­da­tion site visit. “The process through which the ap­provals are given are very strin­gent, tran­spar­ent and ac­count­able. “The min­istry part­nered with the FDB to pro­vide mi­cro and small busi­nesses the op­por­tu­nity to be part of a com­mer­cial bank’s data­base. The busi­nesses who are suc­cess­ful un­der the MSBG, es­sen­tially re­ceives the ap­proval of the Fi­jian Gov­ern­ment.

So down the line, the pos­si­bil­ity ex­ists to raise a loan with the FDB to ex­pand their busi­nesses even fur­ther. “By hav­ing FDB as a part­ner we are open­ing up the main­stream bank­ing sys­tem to peo­ple who were once ex­cluded. And keep­ing them out of the clutches of loan sharks and other un­scrupu­lous peo­ple. FDB com­pared to other fi­nan­cial in­sti­tu­tions in Fiji, has the widest reach with a net­work of branches around Fiji, es­pe­cially ru­ral and ar­eas that are not con­sid­ered com­mer­cially vi­able to op­er­ate in, such as, Tave­uni, Nabouwalu and Seaqaqa.

In­dus­try, Trade and Tourism Per­ma­nent Sec­re­tary Sha­heen Ali.

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