Bank fees could suffocate small businesses
As the holiday season approaches, entrepreneur and past president of the Small Business Association of Jamaica (SBAJ), Hugh Johnson, said many are struggling in the sector due to increasing pressure being placed on them by the banks, among other things.
Although the government continues to boast about the growth of the economy and the decreasing unemployment rate as major accomplishments, Johnson noted that the reality on the ground is that small business owners, who, based on official statistics, employ between 80 to 90 percent of the working population, are discouraged.
“The small business sector feels like they are being raped by the bank, and the government, who should be the police, is not acting on our behalf. They are aiding and abetting the raping of the sector,” lamented Johnson.
Johnson said there are about 400 business owners who make up the association at any given time, but he pointed to statistics from the Statistical Institute of Jamaica, which show that there are nearly 500,000 small businesses on the island. Some 400,000 are on the official register while another 400,000 remain unregistered. He said many of these owners are agile and are in survival mode; even so, he noted that, “It’s difficult, and it has been getting more difficult by the day.”
Opposition Member of Parliament Fitz Jackson has been speaking out about the oppressive operations of the banks and had even filed a lawsuit against the Bank of Nova Scotia (BNS) over the bank charging cheque encashment fees. However, Judge Crescentia Brown Beckford recently ruled that BNS is allowed to charge the fees according to the Banking Services Act. Jackson’s attorney has since indicated the parliamentarian’s intention to appeal the ruling.
Johnson noted that small business owners can relate to the issue that is being raised by Jackson, as the banks currently charge fees for a number of services. He noted that there is a charge for a bank statement, for withdrawal, to deposit, among other things. The business owner believes that Jackson did not get sufficient support for the cause and hopes he does not give up.
“I think it’s worth fighting for, and we should continue to press to get the government to at least see the light and legislate to stop this raping of the small business sector. When the larger businesses can absorb these shocks, small businesses have it really difficult to manoeuvre when these sudden fees come upon you that you can’t budget for or plan for,” he argued.
According to the Jamaica Information Service (JIS), medium, small, and micro enterprises (MSMEs) make up over 97% of the island’s taxpaying businesses. These businesses employ between one and 50 employees and are therefore responsible for the majority of employment in Jamaica.
