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Atlantic's LEND agency
In the market for a loan?
The LEND Agency supports community entrepreneurs and markets, and turns business into profit centres for families and sole traders.
A popular nuts and channa vendor purchased a new stove. The DJ bought a state-of-the-art customized stage for Point Fortin’s Borough Day and other events. Fisherfolk and farmers acquire timely injections of funding to keep their businesses growing. The coconut oil processor sells out his stock after every crop. The bee-keeper has expanded into other bee and honey products. Over 300 small enterprises are allowing owners and proprietors to support families and employ others; to attract suppliers as well as customers and clients to participate in the thriving small business sector that’s growing in Trinidad’s southwest peninsula.
That’s no small achievement in an area of Trinidad that has recorded high unemployment rates and low numeracy and literacy up to the time of the last census (2011).
The Loan for Enterprise and Network Development (LEND) agency was established by LNG producer Atlantic in Cedros in 2014 to serve the communities in Trinidad’s southwest peninsula: Buenos Ayres, Icacos, Cedros, Santa Flora, Palo Seco, Point Fortin and La Brea. LEND offers financing to micro, small and medium enterprises (MSME), sole traders and new entrepreneurs who might be ineligible for mainstream bank loans.
The LEND objectives are:
• To promote economic welfare in the communities of Trinidad’s southwestern peninsula, by facilitating new or expanded business activity in key non-energy sectors;
• To foster small and micro-enterprises that would be independent and self-sustaining, and contribute to local economic activity;
• To procure capital and to provide loans and guarantees for MSME and entrepreneurs;
• To offer and facilitate management and technical advice and services;
• To identify and disseminate information on business opportunities to generate employment, make use of local materials and/or local skills, or otherwise contribute to local expertise or economic activity;
• To enable access to skills training to support the economic development of the communities.
The LEND process is simple but flexible, tailored to the needs and potential of each business. Entrepreneurs are invited to visit the LEND offices in Bonasse Village, Cedros. Field officers also visit applicants in their communities and search out innovators and new potential business. The LEND structure is multi-layered. It begins with person-to-person interactions which are then followed up with a formal interview. The interview and a needs-analysis determines the viability of an enterprise. Recommendations are then put forward to a credit committee which makes final determinations about the longer term feasibility of the business, sizes of loans and repayment schedule. Perhaps because the process is so personal and tailored to specific needs, there’s low delinquency.
In the first year of operation in 2015, LEND disbursed 53 loans totaling one million TTD; in 2016, 93 loans totaling 1.8 million TTD; and in 2017, 151 loans totaling 4 million TTD. The LEND business emerged from the intervention to promote Local Economic Development (LED) in Point Fortin and environs, which was a collaboration of the InterAmerican Development Bank (IDB) and Atlantic, executed by the Trade and Economic Development Unit (TEDU) of the University of the West Indies St Augustine.
Following a series of LED consultations with various community stakeholders, the strategic direction emerged through a four-pronged approach: institutional capacity building; development of micro and small entrepreneurs through access to credit; increased employability of youth; and capturing and sharing learning.
Capacity building through numerous sport and education programmes has always been a cornerstone of Atlantic’s CSR strategy in southwest Trinidad. The most well-known of these must be the Point Fortin’s Finest Leadership Development programme, in which top SEA students are nurtured with grants for secondary school and later, tertiary level training of their choice. Over the years since 2000, some 200 youngsters have been enrolled. They enjoy regular group interactions are afforded internships at Atlantic and are encouraged to give back to their communities through leadership and mentorship.
The same careful, consistent and sustainable approaches have been applied to the needs of micro, small and medium businesses that lack the basic collateral and prerequisites to qualify for
loans in the traditional banking system. These small business operators may be at further disadvantages by having to operate in remote communities. These considerations led to the development of a business plan that could support the unique personalized micro-financing agency. LEND is a registered business with a board of directors experienced in the banking and business sectors. Its office was established in an area where traditional fishing and agricultural enterprises needed a boost. The small staff is well-known in the community. With continued funding and support from Atlantic, it is hoped that LEND will grow its annual loan portfolio to 10 million TTD in the next three years, by which time it expects to be self-sustaining.
The Micro, Small and Medium Enterprise sector (MSME) accounts for the majority of private enterprises in the Caribbean, and contributes more than 50% to Gross Domestic Product and employment. The sector also contributes significantly to female employment, poverty reduction and social stability. Nevertheless it remains a sector that is largely under-supported. Given the important role of the sector, the major challenge facing policy-makers today is to ensure that MSMEs receive adequate support needed to enhance competitiveness; maximise growth potential; and generate employment while contributing to gender equality, and poverty reduction. The Caribbean Development Bank in a 2016 report, made recommendations that the MSME
Development Strategy should adopt the three-tiered approach effectively implemented in Singapore, Korea, Western Europe, Costa Rica and other successful countries during the past two decades: First Floor: support at the first floor, focusing on productivity and product quality enhancements among MSMEs to strengthen competitiveness, job creation and GDP; Second Floor: strengthen and modernise the efficiency and effectiveness of organisations and other intermediary structures providing developmental and other services to the sector; Third Floor: formulating enabling policies, legislation and strategies thereby improving the business friendly environment for MSMEs.
Atlantic’s VP Corporate Operations Toni Sirju-Ramnarine, welcomes a new cohort of leaders to the Point Fortin’s Finest Programme.
Apart from microfinancing, LEND clients also benefit from advisory services tailored to the needs of their business.
(Excerpted from “Micro-Small-Medium Enterprise Development in the Caribbean: Towards a New Frontier”)
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