Chambers: Businesses need more than a loan to survive pandemic

Jai Leladharsingh, coordinator of the Confederation of Regional Business Chambers has said despite the ongoing covid19 vaccine rollout, many people were still wondering what recovery would look like.

He said “In response to the covid19 economic fallout, central banks in many countries, including (in) TT, have slashed interest rates. That should, in theory, make borrowing cheaper and encourage spending to boost the economy, but this has not been the reality for TT.

He told Business Day that many SMEs would have to close indefinitely if there was not meaningful intervention from government through assisted loans and loan deferrals.

TT’s economy, Leladharsingh added was already in a precarious position, having already experienced an economic downturn from the external collapse of commodity prices in natural oil and gas.

“The resultant internal economic slowdown from the closure of non-essential businesses and services placed further strain on the economy.

“Business recoup and recovery must be looked at as a comprehensive intervention because growth in jobs, retrieval of incomes and the revival of commerce, which involve both consumer confidence and business to business engagement, all depend on looking at the private sector as a system that can thrive and on which many stakeholders depend on.”

The government said it has set aside almost $300 million in the small/medium enterprises stimulus loan programme. According to the Ministry of Finance, the loan was a government guaranteed loan granted for a maximum of five years with a two-year moratorium on principal payments. The interest on the loan would be paid by Government and there would be no handling fees.

But Leladharsingh said this was just the tip of the iceberg of relief that is needed for businesses to survive.

He pointed out that many businesses have closed never to reopen, and more were expected to collapse.

“The Central Bank intervention with the banks is not a sufficient intervention. Businesses are in trouble and a significant number of SMEs are permanently damaged. Many businesses will need to be actively helped to get back on their feet or they will just not make it.

“Managing liquidity to solvency, developing attractive combination packages of debt and equity, government, business and academia support for digitisation of businesses to facilitate competitiveness, and transforming traditional retail entrepreneurs into valuable investors in import substitution and export-oriented endeavours were some proactive measures that should be looked at,” Leladharsingh said.

Greater San Fernando Chamber of Commerce president Kiran Singh added that assistance through VAT refunds and cuts in utility expenses were immediate intervention for government to consider at this time to assist SMEs.

“The surplus funds given to the commercial banks for the SME sector should have been allocated to service VAT refunds. Cashflow is needed to sustain business in this time.

“Utility expenses, especially electricity remains a large budget item. Despite several appeals TTEC has not given any concessions. We continue to appeal to the government to ease the burden of the MSME sector with respect to utilities during this time that we remain closed,” Singh said.

Singh and Anil Ramjit, president of the Gasparillo Chamber of Commerce said their current focus was lobbying for vaccines, and they were working closely with the Supermarkets Association to copy their vaccination model in hope that vaccines were provided by the Ministry of Health.

Chaguanas Chamber of Industry and Commerce (CCIC) president Richie Sookhai agreed that SMEs remained challenged in accessing funds from the stimulus loan programme because the requirements were too stiff.

“SMEs their biggest problem were non-compliance and not being able to meet some of the requirements. The CCIC was reaching to the SMEs to assist them in becoming compliant.

“The loans are government backed, so we are appealing to the banks to reduce the requirements needed because some individuals just do not have it.”

Sookhai added businesses also needed to use the pandemic to transition their business to an online platform in order to make it more lucrative.

“The pandemic has shown where brick and mortar structures do have an expiry date. It has opened the conversation and possibilities to allow the SMEs to try to pivot their business model into something more sustainable.”

“Unofficial figures showed that nearly 45 per cent of businesses within Chaguanas and environs were willing to incorporate an online platform into their business model,” Sookhai said.

Sookhai noted that between 2015 to present 20 per cent of between 2,000-3,000 businesses were forced to close for varying reasons, the majority owing to the fallout of the covid19 pandemic.

The CCIC is not part of the Confederation.

Gary Kallicharan, owner of La Pique Plaza and Pegus Security Services located in San Fernando said his savings have dried up and he cannot afford to sustain his businesses any longer.

He noted that his companies were still standing based on good faith with other companies with which he has a good rapport.

Kallicharan said to date the security service was fortunate to retain its 300 staff members but most of the tenants at La Pique Plaza are non-operational.

“I am unsure if any of the tenants at the Plaza will close permanently because they simply have no funds to sustain their businesses.

“Many business owners have recurring expenditure, and, in my case, I’ve just asked my tenants to assist with that.”

Kallicharan said it was unwise to enforce lockdowns because people and businesses were scraping to survive.

“We have to come up with a strategy to live with covid19. The country cannot sustain too much of a lockdown, that just not an option. Whatever we do we must look at sustainability. The calls for lockdowns come from a sector of the public that is not affected by the economics of social displacements.

“When the economy reopens, it is going to start very small and grow very little. Proper government investments in construction and oil and gas sector were needed to boost the economy in the coming years.”

The Confederation of Regional Business Chambers

Members of the Confederation of Regional Business Chambers are San Juan Business Association, Greater Tunapuna Chamber of Industry and Commerce, Eastern Business and Merchants Association, Couva/Point Lisas Chamber of Commerce, Gasparillo Chamber of Commerce, Greater San Fernando Chamber of Commerce, Cunupia Business Association, Penal/Debe Chamber of Commerce, Siparia Chamber of Commerce, Point Fortin South Western Chamber of Industry and Commerce, Petroleum Dealers Association, Petroleum Dealers Cooperative Society, Yachting Marine Services Association. The Supermarket’s Association is an independent affiliate member.