The Power of Collaboration: A Multi-Stakeholder Approach to MSME Development in the Caribbean

Late last month, I had the unique opportunity to engage with a diverse group of policymakers, industry leaders and representatives of Micro Small and Medium Enterprises (MSMEs) from countries throughout the Americas hemisphere at the VIII Inter-American Dialogue of High Level MSME Authorities and Conference. Jointly held by the Organisation of American States (OAS) and the United States Chamber of Commerce, the event sought to address the theme “Expanding International Market Opportunities for MSMEs”. The Dialogue in particular brought together 28 OAS member states represented by government executives with portfolio responsibility for MSME development to engage openly with members of the private sector, academia, development banks, and international organisations, all in an effort to coordinate the bold action required to support the development and growth of MSMEs in this region.

With input from across such a comprehensive cross-section of stakeholders, the discussions at the Dialogue and Conference were both enriching and insightful. All participants gained a more nuanced and holistic view of the problems inhibiting the development of MSMEs and felt invigorated to be a part of powerful, multifaceted network working to resolve them.

While the event aligned to efforts to achieve numerous Sustainable Development Goals including SDG 8: Decent Work and Economic Growth, SDG 9: Industry, Innovation and Infrastructure and SDG 10: Reduced Inequalities, the relevance and value of one particular SDG truly hit home for me during my interactions in my capacity as a leader of Caribbean industry. That goal was SDG 17: Partnership for the Goals.

In our regional landscape, development challenges loom large, from economic disparities to environmental vulnerabilities. Addressing these complex issues requires more than a single entity's efforts; it demands a cohesive, multi-stakeholder approach involving governments, businesses, and international organisations.

Governments as the primary architects of policies and regulations, set the agenda, allocate resources, and enforce laws that shape the development trajectory of nations. Businesses, both large and small, are engines of economic growth and innovation, driving productivity, creating employment opportunities, and catalysing investment. International organisations serve as catalysts for development by providing technical assistance, financial support, and expertise. They offer a platform for knowledge exchange, policy dialogue, and coordination among stakeholders.

Each stakeholder brings unique strengths to the table where their collective impact is far greater than the sum of individual efforts. This is particularly true where interconnected issues require integrated interventions. The expansion of the MSME sector is a prime example of one such development issue in our region.

While definitions may vary across countries and regions, the Caribbean Community (CARICOM) defines MSMEs as firms with 50 employees or less; capital or assets of US$1 million or less; and annual sales of US$3 million or less. Of course, this very definition presents an opportunity to refine and further segment the Micro Small and Medium Enterprises into their respective parts in order to tailor bespoke, well thought out solutions. Nevertheless, what is undeniable is that MSMES are considered to be the backbone of Caribbean economies. According to the Caribbean Development Bank, MSMEs represent between 70-85% of Caribbean businesses, contribute between 60-70% of Gross Domestic Product in the region and account for an estimated 50% of total employment.

Despite their integral importance to the Caribbean economy, MSMEs face a myriad of challenges. In fact, informed by the Dialogue and Conference held in March, the OAS Secretariat identified eight (8) priority areas of action for the period 2024-2027 if substantial progress is to be made for MSME growth and internationalisation in Latin America and the Caribbean. These areas are:
1. Accelerate MSME formalisation;
2. Promote multidimensional approaches and an enabling environment for providing access to finance for MSMEs;
3. Address the specific needs of women entrepreneurs facing financial and digital exclusion;
4. Accelerate MSME digital transformation;
5. Alleviate customs and international regulatory obstacles for MSMEs;
6. Address transportation and logistics barriers for MSMEs;
7. Expand trade opportunities for MSMES and increase market access, particularly through e-commerce; and
8. Strengthen MSME capacity building programmes.

They are challenges that demand a multi-stakeholder approach, anchored in collaboration among the MSMEs themselves, governments, businesses, and international organisations.

At Republic Bank, we have and continue to work with MSMEs, governments, enterprises, civil society and international organisations to overcome these complex problems. The examples of this are plentiful and coincidentally, already align to some of the priority areas of action outlined by the OAS:

Priority Area: Providing Access to Finance for MSMEs
• Our Group’s pledge to lend and invest US$200 million in climate financing by the year 2025 in keeping with our commitment as a member of the United Nations’ Environment Programme Finance Initiative and signatory to the Principles for Responsible Banking. This funding will be used to support and encourage businesses (including MSMEs) with focus on renewable energy, climate resilience, mitigation, and adaptation. Today, our Group Renewable Energy portfolio stands at US$51 million or 25% of our US$200 Million Climate Finance Goal.
• Additionally, in response to call of CARICOM Heads of Government to reduce the Caribbean’s food import bill by 25% by 2025, the Republic Group has committed US $100 million to fund sustainable agriculture across CARICOM and it is anticipated the micro, small and medium agripreneurs will benefit once this facility is accessed.
• In 2021, Republic Bank (EC) and Republic Bank (Grenada) launched guaranteed loans of up to EC$300,000 for small businesses and up to EC$100,000 for Start-Ups in partnership with the Eastern Caribbean Central Bank (ECCB) and the World Bank under the Eastern Caribbean Partial Credit Guarantee Corporation, (ECPCGC). MSMEs in St. Lucia, St. Kitts and Nevis, Dominica, St. Vincent and the Grenadines and Grenada stand to benefit from this initiative.

Priority Area: Addressing the Needs of Women Entrepreneurs
• While my fellow Vice President of Republic Bank, Karen Yip Chuck details our activities to support women entrepreneurs in this blog, the Entrepreneurs Business Builder (EBB) is our signature initiative. The EBB is an acceleration programme offered in collaboration with BPD & Associates that assists established women entrepreneurs with creating technology-enabled, sustainable and profitable businesses. One hundred and eleven women (111) entrepreneurs from across the Caribbean have since graduated from the initiative. This year, another eighty (80) women entrepreneurs will join and benefit from 80% scholarship financing through our Power to Make a Difference corporate social responsibility programme.

Priority Area: Strengthen MSME Capacity-building Programmes
• In 2009, the Republic Group introduced our SME Toolkit Caribbean in partnership with the International Finance Corporation (IFC), a member of the World Bank Group. Over the years, the site has become a go-to portal on matters relevant to managing a business in key areas such as drafting a business plan, accessing legal, accounting, and financial advice and market information.
• In 2022, our Group signed a Memorandum of Understanding with Caribbean Export to enhance the global competitiveness of MSMEs in CARIFORUM states through a referral system. The MOU was extended in 2023 and aims to assist MSMEs to boost their export capacity with training on accessing export markets.
• Through our Power to Make A Difference corporate social responsibility programme, Republic continues to partner with other non-governmental organisations and community groups with a mission that seek to promote entrepreneurship as a viable economic option for women, youth and underserved communities.

The Bank’s participation in the OAS’ VIII Inter-American Dialogue of High Level MSME Authorities and Conference is yet another illustration of our recognition of the value and power of collaboration. Upon its conclusion, the Dialogue resulted in the proposal of numerous solutions to the systemic challenges impeding MSMEs that can only be implemented effectively through the synergy, innovation, and shared responsibility of cross-sectoral collaboration. We at Republic Bank remain committed to being an active ally, contributor and co-creator, working with other stakeholders towards the goal of building the enabling eco-system for MSME development.

For the MSMEs of our region, it’s the only way true sustainable change will be realised.