SMEs struggle to access financial backing
MICRO, small and medium enterprises face additional challenges securing financial backing according to president of Asia-Pacific Applied Economics Association (APAEA) Professor Paresh Narayan.
Supporting the growth of SMEs as a key strategy for economic growth was among the ideas proposed at the second Knowledge Economy Lecture held at the Grand Pacific Hotel in Suva this week.
According to Prof Narayan some SMEs may not have enough cash flow to have access to insurance.
“Of course, insurance comes with premiums. So the issue is that they are not able to afford the financial backing because they are already under financial stress.”
Many SMEs also facing crises surrounding climate change and natural disasters, the lack of access to insurance creates a cycle of financial strain that’s difficult to escape without external intervention.
“This is why I asked that banks come up with innovative models [that can be more accessible specifically for SMEs] because they are the ones who can give them that sort of financial support,” Prof Narayan suggested.
In addition to this, more forums and platforms for communication with SMEs to allow their involvement in policy-making was also proposed at the lecture earlier this week.
“Those are the forums they can use to tell the stories that they have experienced, and see to what extent those stories can be incorporated in the strategic plans of the industries,” added Prof Narayan.
Minister for Finance and Deputy Prime Minister Professor Biman Prasad made mention of an economic summit planned for either March or April of this year which will be inclusive of SMEs.