Improving Access to Finance for Small and Medium Enterprises in Trinidad and To

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Lack of access to appropriate credit products for financing of expansion and growth of SMEs in Trinidad and Tobago is a barrier to the development of this important sector. . In Trinidad & Tobago it is estimated that there are some 18,000 SMEs in T&T employing approximately 200,000 persons or close to 35% of the workforce and contributing near 28% of GDP. The development of these enterprises is dependent in part, on access to credit to finance expansion and growth, Despite high levels of liquidity in Trinidad and Tobago¿s financial sector, many of these SMEs are unable to access appropriate financing to fund their growth and development, either because funding institutions a priori brand them as high risk, or they themselves fail to do basic things like keep their financial records up to date, or formulate a proper business plans to facilitate some level of risk analysis. Most financial institutions do not have a structured methodology, tools or in house capacity for the evaluation of credit risk and the structuring and pricing of relevant credit facilities for the SME sector Resulting cost, structure and terms of credit result in many enterprises being unable to finance expansion and growth or to reinvest into their business. The objective of this project is to improve SME access to credit by piloting an SME rating methodology that will assist financial institutions in assessing, structuring and pricing credit facilities for SME clients. 5 of the 7 main commercial banks in Trinidad and Tobago have agreed to partner with BATT to implement this initiative. This pilot program will demonstrate to credit officers a proven approach to the objective assessment of SME business performance and credit worthiness.