Micro-Entrepreneurs are emerging as a new sub-sector in Guyana

The micro enterprise sector appears to be surviving in Guyana , however one of the limiting factors is the lack of capital. This report further notes that this sector is largely untapped by "intermediate institutions including commercial banks and non-government agencies."  Therefore, opportunity exists for development and growth within this sector for the training of small business owners. 

Some training programs are being offered through a number of non-governmental agencies; however, a comprehensive approach is yet to be developed.  A comprehensive strategy would require entrepreneur-training, access to capital and technical support to the business owner during the first several years of operation. One of the fundamental challenges that a newly trained entrepreneur faces, is the access to capital and a continuous support system to the business during its formative years.   In essence, there is need for a kind of "business extension service" type support in which the capital funding agency has trained "extension" personnel who makes frequent visits and provides technical support (management, inventory control, revenue and expenditure guidance, and marketing etc) to emerging businesses.  

In Guyana there is no legislation or policy that facilitates entrepreneurial growth. This is a burning issue among potential entrepreneurs. Over the past few years keen developers of this sub-sector had done some research and the following is an overview.

Various entities use different methodologies to assess the size of this potential market (micro-Entrepreneur). There are differing criteria to describe a potential micro-entrepreneur. However, the most common criterion makes reference to the unemployed.

It is estimated by a large multi-national agency that this sub-sector has potential for approximately 20-33% of the total country population to become entrepreneur, increasing the current level significantly.

According to Mr.Brijmohan, a veteran of this sub-sector, the total number of micro entrepreneurs who were trained and /or received micro financing in the past year is approximately 8000 confirming recent statistics. His report went on to say that the majority was in the age of 35-40 and 75-80% were females.

In Guyana figures are quoted showing participants passing through training and repaying micro-credits of approximately six months duration, however, statistic on entrepreneurs whose businesses are in second to third year are not known.

In view of the high risks associated with this type of lending, delinquencies and default are high. This is reflected in a much higher cost of financing to borrowers. Interest rates are generally calculated on a straight-line basis of 24% per annum, while traditional lending is 17-18% calculated on a reducing balance basis. Most recent financial reports indicate that lenders in this sub-sector are reporting good profitability.

Participation in micro entrepreneur training and financing programs is increasing. With these broad estimates as a guide and the current trend globally and locally it is envisaged that the demand for this sector will continue. The potential market is much larger than the current level.