‘There’s Never Been’ This Much Volatility For Small Businesses: Richard Sammy

By Kekeletso Nkele, small.news Assistant

Q: What is your current thinking on small businesses as a customer, as a part of the bank?

A: When we looked at small businesses, traditionally, banks and in the Caribbean, as well as the rest of the world, sort of lumped small businesses in the commercial activity, and there might have been some overlap with corporate and retail.

What we’ve recognized is that the needs of small businesses vary significantly and are very different compared to individual retail and corporate. So we decided to have a very targeted approach to small businesses as one, but the more compelling reason is when you think about the value of small businesses in the region.

In the Caribbean, SMEs make up around 70 to 80% of all businesses, and they contribute an estimated 60 to 70% of the region’s GDP, with 50% employment, and when you look at those metrics along the wider economic growth model, it’s just astronomical the value and impact.

Q: What’s going on in the economy in the Caribbean right now?

A: One of the reasons why the Caribbean is sometimes misunderstood is because it is treated as as a single sort of economy which is not a case, if you look across the entire region you have the northern Caribbean and those countries like British Virgin Islands, Cayman Islands, Bahamas they specialize in financial services if you think about the eastern and or middle Caribbean they are heavily tourism based and sort of small scale agriculture.

In the southern Caribbean, you have oil and gas and energy-related products, so they’re all very different in terms of the sectors the main GDP drivers, and each of those economies demands a different sort of treatment.

Which is why we tend to use our local on-the-ground knowledge to tap into some of the different sectors across the region. We just launched our sustainability report, our inaugural sustainability report. Just in Trinidad and Tobago alone, we have met and worked with SMEs in the past year.

There is always a risk of people assuming that small businesses will have a higher default rate or delinquency rate. The rates are holding; they tend to creep up a little bit, but again, well within what is the risk tolerance of the group, so there is that untapped demand once you understand that a region is very different.

Q: 90% of women are ambitious, smart, and talented in growing their businesses. Why do you think that is?

A: One could be that in the Caribbean, there are still some traditional rules that men would be moving legacy forward but the women in the region tend to do a lot of different roles in addition to managing a household. Also, working a regular job with a side hustle has become increasingly embraced in society.

Q: What are you most worried about for small businesses?

A: There’s never been this heightened amount of volatility, and when you think about the geopolitical challenges and the impact on economies, that speaks for itself. If we narrow it to the region, however, there are a couple of things that stand out as macro risks. One that you didn’t mention, which is very near to us, is the natural disasters. Our islands are fragile and susceptible to natural disasters; we just had hurricane Melissa hit Jamaica. A lot of the islands are still working, trying to rebuild them, ensure that the health and education facilities, and the infrastructure.

Small businesses are less able to bounce back from natural disasters, and some of the larger ones in the conglomerate so natural disasters. Some of the geopolitical tensions that, for example, currently exist within Venezuela, exactly because it’s so close correct pushes that uncertainty and and in the realm of uncertainty there’s always a sort of wait and see or hesitation in terms of investing into small business and sometimes creating the enabling environment, so those two, in addition to those that you mentioned, come to mind.

Q: What’s the biggest opportunity in the midst of all of this going on?

A: The biggest opportunity for small businesses is undoubtedly digital transformation, and I say digital transformation as an umbrella term. But under that, especially in the region where businesses are still fledgling to move from traditional along the spectrum e-commerce opportunities, direct to customer, B2B payment opportunities, marketing opportunities, even digital wallets. Republic Bank launched a digital wallet app with the view of minimizing cash, specifically aimed at small businesses.

Q: If you had a Magic Silver Wand you could use to do one thing right now that you think would help small businesses globally, what would you do?

A: The one big change I would make is leveling the playing field, and that’s really from the point of view of the opportunities that varying businesses at different sizes and scales and complexities would have in the operating environment, particularly in the region where we have different legislative structures, different ICT stages of readiness, different needs from customers, and preferences. The perfect knowledge and leveling of those opportunities so that it’s not a handout, which certainly is starting from this level of privilege compared to some of the other larger counterparts, that would make a world of difference.

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