Minister Hew Updates
Fellow Caymanians, as we are all aware, this global pandemic has caused significant economic dislocation across the globe.
Right here across our Islands, we see economic activities in major sectors have come to a halt. And, there is no doubt that business and commerce will be affected in many ways that we did not anticipate.
I want to assure the people of the Cayman Islands that the Government will do all that it can to ameliorate the effects of the pandemic and give these Islands the best chance of recovery.
As the Honourable Premier has mentioned on a number of occasions, there are discussions taking place concerning our support for the business sector and economy but as a Government, we will continue to place priority on flattening the curve of new cases so that our Islands can get back on its feet (at least) with domestic activities in the near future.
In our immediate response to provide support to micro and small businesses amid COVID-19, the Government through my Ministry fast-tracked the opening of the Cayman Islands Centre for Business Development to late last month. The Centre has had to adapt its original plans to respond to the needs at hand.
Since the time of opening, I am pleased to report that staff members at the Centre have been conducting daily virtual and teleconference meetings focusing on business continuity for many business owners who have been impacted by COVID-19.
I would like to encourage other entrepreneurs with an urgent need for assistance with cash flow management, business impact analysis or those who need to redesign or re-think their business models - to contact the Centre.
As part of our efforts to arrest the economic disruption of COVID-19, my Ministry will be implementing a number of relief measures to support our micro and small businesses. The Government has always been proactive by making it a strategic priority to implement initiatives to support micro and small enterprises across the Islands.
Our small business incentive programme, for example, has benefited more than 5,000 micro businesses and 700 small businesses since its inception in 2017. This has cost the Government over $2.8 million dollars.
The thousands of micro and small businesses across these Islands are an important part of our economic ecosystem.
They are our small retail shops, restaurants and cafes, beauty salons, tour operators, web developers, marine services, hotel suppliers, pest control, janitorial services and the list goes on.
The health of these sectors are important to the well-being of our Islands.
The measures that we will now implement to support these micro and small businesses will be in the form of a:
- Low Interest Loan Programme;
- Technical Assistance Programme;
- Training Programme; and a
- Micro and Small Grant Programme.
Low Interest Loan Programme
The Low Interest Loan Programme will provide financial and non-financial support to micro and small businesses affected by COVID-19. The loan scheme will provide initial funding in the amount of Five Million Dollars ($5,000,00.00).
It is intended for micro and small businesses that require help to meet their operational cash flow requirements. This loan programme will be administered through the Cayman Islands Development Bank and will benefit businesses that are 100% Caymanian-owned.
The programme will provide each borrower with a fully-backed government guarantee.
The amount available to:
- Micro business - will be up to a maximum of $20,000.00.
- Small business - will be up to maximum of $50,000.00
There will be a six-month period of moratorium during which the bank will not collect principal or interest payments. The loan will be given for a period of five (5) years at 1% interest in the first year, subject to increase thereafter.
The application process for this loan programme will be through the Cayman Islands Centre for Business Development, which falls under the remit of my Ministry.
Of course, applicants must meet specific criteria for assistance.
Technical Assistance Programme
The Technical Assistance Programme will involve the use of paid qualified accountants and other professionals to provide technical guidance and coaching to micro and small businesses to help them navigate this difficult period and keep their financial obligations to financial institutions.
This programme is directed particularly at recovery from COVID-19.
Technical Assistance will initially be provided for one year and the programme of assistance will include, among other things:
- Document preparation to access financing, grants or other stimulus products;
- Preparation of business plans, strategic plans;
- Business Model Design/Innovation;
- Business Forecasting;
- Business Impact Analysis; and
- Human Resource Services.
The assistance will take the form of one-on-one consultation and coaching sessions with clients.
The total amount of funds that has been allocated to support the Technical Assistance Programme is Five Hundred Thousand Dollars ($500,000.00).
Training and Handholding Programme
I must emphasise to our micro and small business owners, that training and coaching will be integral to the programmes in order to help you navigate the new world of business that will emerge post COVID-19.
The training modules will cover areas such as Managing Cash Flow in a Crisis; Harnessing the Entrepreneurial Mindset; Managing Changing Human Resource Needs and Business Model Innovation. We encourage especially our micro and small businesses to take advantage of this as it will be provided at no cost to you. Participation in at least one of these sessions will be a pre-requisite for accessing the loan.
And outside of the training associated with the loan programme, other training sessions will be available to business owners as their needs are assessed.
The amount approved for the training programmes will be in the amount of Twenty One Thousand Dollars ($21,000.00).
Micro and Small Business Grant Programme
In addition to those initiatives, Cabinet has also approved the amount of Nine Million Dollars ($9,000,000.00) to support the micro and small business grant programme.
The Micro and Small Business Grant Programme targets three thousand vulnerable micro and small businesses and is intended to provide [initial] assistance of $1000.00 monthly to selected business for three months.
The objectives of this programme will be to:
- Provide working capital assistance to micro and small businesses affected by COVID-19 which have enough of a domestic market to render the businesses recoverable; and
- To aid in the re-purposing and transition of businesses that had a large tourist market and have demonstrated the ability to transition to a larger domestic market.
In terms of eligibility criteria for the grant programme, a business must have been operational for at least twelve (12) months prior to March 2020.
It must meet the definition of micro and small business as set out in the Trade and Business Licensing Law and must evidence COVID-19 related increase in receivables and/or decrease in sales as at March 2020.
Applications for the Micro and Small Business Grant Programme will be done through the Centre for Business Development.
The total amount in assistance that Government is providing to support the COVID-19 micro and small business relief measures is Fourteen Million, Five Hundred and Twenty One Thousand Dollars (14,521,000.00).
Funding for the Low Interest Loan Programme will be provided by the Cayman Islands Development Bank.
The Technical Assistance Programme and Training Programmes will be funded by the Ministry of Commerce, Planning and Infrastructure.
And, the Micro and Small Business Grant Programme will be funded by Government Emergency Funding.
In terms of programme administration, the validation and verification checks will be carried out by the Cayman Islands Centre for Business Development. There will be programme guidelines for applicants and monitoring post disbursement.
Information on all of these the programmes I have mentioned will be widely disseminated to the business community and other stakeholders and will also made available on the government website, www.gov.ky/coronavirus.
Interested business owners can also directly contact the Cayman Islands Centre for Business Development at CICBD for more details. I want to thank the staff of the Centre for taking on this herculean task at this time.
In the coming days and weeks, we will continue to engage in discussions with members of the business community and other stakeholders to find interventions to lessen the impact of COVID-19 on your economy and our people.
When we come together, we are stronger and there is nothing that we cannot overcome.
May God bless you, may God bless our Islands.
For clarification as per Trade and Business Licensing Law:
Micro business - means a business that employs less than five persons, not including the owner and has an annual gross revenue of two hundred and fifty thousand dollars or less;
Small business - means a business that employs up to a maximum of twelve persons, not including the owner, and which has an annual gross revenue of up to seven hundred and fifty thousand dollars.