Banks must rethink lending practices that place collateral beyond the reach of small entrepreneurs, President of the Berbice Chamber of Commerce and Development Association, Samantha Reid, has urged, arguing that those requirements are restricting business growth.
Speaking on the Energy Perspectives Podcast, Reid said many small and medium-sized enterprises need financing to expand but lack the assets required to secure loans.
She called for greater consideration of the projects entrepreneurs want to pursue, rather than relying so heavily on the security they can provide.
“The banking system here in Guyana, they want collateral. Now, small, medium-sized might not have that collateral. If you don’t have that, they won’t give you the loan,” Reid said.
The Chamber President, who also operates a construction and procurement company, said the issue affects many businesses in Berbice.
“But I think the bank needs to revise that because it really stymied the small and medium-sized business from growing,” she added.
Reid welcomed the government’s development-bank initiative as a potential source of support for entrepreneurs unable to meet conventional lending requirements. However, she maintained that commercial banks also needed to reconsider their approach.
“I think what they should do is invest in projects,” she said, arguing against requiring collateral for every financing request.
In her view, initial financing could help entrepreneurs establish operations or expand an existing business. As those businesses develop assets, infrastructure and a record of profitability, they would be better positioned to approach traditional banks for further funding.
Reid’s appeal was informed by her own experience of trying to secure credit while building her company.
She recalled starting with a $200,000 contract and repeatedly putting earnings back into the business. Several banks initially declined to finance her, she said, before one eventually approved a $5 million overdraft.
That facility later increased to $15 million as the business grew.
Reid said repaying loans, maintaining relationships and delivering work to a high standard helped her establish a track record with the bank.
Her message to entrepreneurs was that access to financing must be accompanied by discipline in how money is used.
“I think too many times we’re looking for short-term gain. We got to look at it at the long term,” she said.
She encouraged business owners to reinvest, maintain proper records and separate the desire for immediate returns from the work needed to build a sustainable company.
Reid also identified financial management as a weakness among some businesses, particularly where owners handle operations without a clear understanding of profit, margins and capital.
She said the Chamber was offering financial literacy courses through the Small Business Bureau to help address that gap.
For entrepreneurs considering their next move, Reid advised building on existing skills and improving the services they already provide, rather than assuming that everyone must enter construction or become an oil-sector supplier.
“Look at what you’re good at, what you’re already doing. How can you make this better?” she said.
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