Imbert: CAF helps SMEs prepare to bid on state contracts

FINANCE Minister Colm Imbert said new funding from the Development Bank of Latin America and the Caribbean (CAF) can help small and medium enterprises (SMEs) to update their accounts and so overcome obstacles to qualifying to bid on state contracts. He spoke at a seminar titled, Catalyst – Propelling SMEs for success in 2025 – hosted by the TT Chamber of Industry and Commerce at its office at Westmoorings on February 11.

Minutes before Imbert spoke, guests heard CAF's Bernado Requena Blanco say his bank had supplied a US$35 million loan to the Exim Bank of TT to support local SMEs. This sum will provide loans, technical assistance and knowledge products for innovations in plant upgrades and digitisation so as to boost their exports, growth and sustainability.

Imbert said TT has about 25,000 SMEs employing 200,000 people and making up 95 per cent of TT's registered businesses. SME's contribute 30 per cent of TT's GDP, he added. Hailing the agility and flexibility of SMEs, he said many local "brick and mortar" businesses actually grew during the pandemic lockdown due to moving online.

Imbert recapped the government's past and ongoing support to SMEs including a $500 million Loan Guarantee Scheme, plus unnamed grant funding and tax-breaks to promote job creation, training and growth. He also mentioned VAT refunds and tax amnesties.

"To date, over 6,000 VAT refunds in various amounts up to $250,000, costing over $500 million have already been issued to SMEs. Payments of over 80,000 individual tax refunds up to $25,000 are also being processed as I speak.

"As you may all be aware, on January 31, the tax and NIS amnesties were extended to March 31." He said this extension allows SMEs which are behind with their tax and National Insurance payments to continue doing business with ministries, statutory authorities, and state enterprises.

"This would also permit SMEs sufficient time to address outstanding tax and National Insurance obligations while playing the vital role of employing people, contributing to the gross domestic product and sustaining economic growth."

Imbert said under the new procurement laws, companies would be locked out of bidding on state contracts if these companies were not up to date with payments of tax and VAT. He remarked that during the pandemic, due to cash-flow challenges many companies had to decide if to pay the costs of keeping their businesses running such as staff salaries and utility bills, or to pay their taxes and VAT, as he rationalised how a deficit in the latter payments could have arisen.

Recalling his budget speech mentioning some SMEs need help, he said the CAF funding could assist them to get their accounts in order.

While saying the fund stood at US$35 million, he said most importantly the Exim Bank could provide SMEs with advisory services and subsidisation of accounting services to prepare their accounts. He expected 100 SMEs to benefit.

The Catalytic Fund will boost TT's non-energy sector, Imbert said, highlighting the creative and agriculture sectors.

"Our rich cultural heritage provides an infinite, boundless, and diverse source of inspiration for the creatives.

"We support the digitalisation of all SMEs and encourage those in the creative sector to incorporate technology into their business."

Imbert hoped agricultural SMEs would play a vital role in reducing TT's $7 billion food import bill. He vowed the sector would remain tax-free. He promised to boost productivity and tackle issues like the impact of adverse weather, insufficient funding and a dearth of farmers, while encouraging youngsters to get into agriculture. "The Government recognizes the importance of SMEs in promoting economic growth, innovation, and job creation in TT.

"This government thus remains steadfast in supporting SMEs and will continue to take action to promote the growth and development of SMEs in all spheres." Imbert revealed that as TT's finance minister he will soon become CAF's new chairman for the coming year, speaking on February 4 at a signing ceremony for the European Union's $24 million Latin America and Caribbean Investment Facility (LACIF) grant agreement to TT.

At the sod-turning for a new headquarters for the Elections and Boundaries Commission (EBC) in St Clair on February 12, Newsday asked Imbert the value of the fund for SMEs. He replied, "US$35 million." Asked if the whole US$35 million would go to the fund for SME's, he replied, "Yes. That goes to the Exim Bank for its partnering with development finance, system finance. It is a sort of start-up thing.

"There is a pool of money available from CAF, US$35 million. But it will be done in stages as we go along."