Geisha Kow­lessar-Alon­zo

It is most­ly “gloom and doom” this Christ­mas for many mi­cro, small and medi­um-sized (MSMEs) busi­ness­es, as the most re­cent cut in forex avail­abil­i­ty by RBC to its cred­it card hold­ers will mean these en­ti­ties will ei­ther be forced to close up shop or lim­it the num­ber of items they will be of­fer­ing this sea­son.

Last week, the Cana­di­an multi­na­tion­al fi­nan­cial ser­vices com­pa­ny, in no­tice to its cus­tomers stat­ed that the month­ly lim­its for most of its cred­it cards will be fur­ther re­duced to $14,000 (US$2,058) from $41,000 (US$6,020) ef­fec­tive De­cem­ber 1.

Sim­i­lar ac­tion was tak­en by Sco­tia­bank when it an­nounced a sig­nif­i­cant re­duc­tion on the forex spend on its range of cred­it cards on Oc­to­ber 30.

Sco­tia­bank said that ef­fec­tive De­cem­ber 1, hold­ers of the Aero Mas­ter­card Black would on­ly be able to spend a max­i­mum of US$5,000 a month. Oth­er cred­it cards of­fered by the ma­jor­i­ty Cana­di­an-owned bank would have a US$2,000 lim­it.

Re­pub­lic Bank made sim­i­lar changes to the forex lim­its on all its cred­it cards since Sep­tem­ber, 2023, re­duc­ing its cred­it lim­it to a max­i­mum of US$5,000.

The de­ci­sions by these lo­cal­ly based com­mer­cial banks con­tin­ue to have a crip­pling ef­fect on MSMEs.

The Sun­day Busi­ness Guardian reached out to sev­er­al small busi­ness­es, most of whom re­quest­ed anonymi­ty whose com­plaints have a com­mon thread—”It’s worse than ever be­fore.”

Some said they are al­ready look­ing “out­side T&T” to do busi­ness in­stead.

“My lim­it is US$1,500 and that can­not bring in the amount of stock we need such as cos­met­ics and house­hold items. For this month so far we have record­ed around $20,000 in loss­es be­cause we can­not get stock from the small­er sup­pli­ers who do not have the forex to buy it. This is forc­ing small­er busi­ness­es to go to the con­glom­er­ates who keep rais­ing the prices and they are the ones who have ac­cess to forex in the first place. So what is hap­pen­ing is that the mid­dle man is be­ing cut off more and more.

“My busi­ness is strug­gling. We are liv­ing off on what­ev­er sav­ing we have to keep the busi­ness go­ing,” one small busi­ness said.

She said she is ex­plor­ing do­ing busi­ness­es with coun­tries in the re­gion.

“I went to Grena­da re­cent­ly and the taxi dri­ver was laugh­ing at Trinidad be­cause we can­not get any forex. He said he can go to the bank and get any amount of forex and this is a taxi dri­ver,” she added.

An­oth­er small busi­ness agreed that more com­pa­nies are seek­ing forex out­side of Trinidad, say­ing this will even­tu­al­ly lead to any forex earn­ings from ex­ports go­ing to those oth­er coun­tries and not com­ing back to Trinidad which will ex­ac­er­bate the cur­rent short­age.

Sev­er­al SMEs fur­ther com­plained there is a lack of con­fi­dence in Trinida­di­an com­pa­nies on the glob­al stage due to the de­lays in pay­ing for­eign sup­pli­ers. Be­cause of this, they said for­eign in­vestors are re­luc­tant to come to T&T be­cause there is no guar­an­tee they will be able to repa­tri­ate their prof­its.

Re­gard­ing the ac­cess­ing of ser­vices, one small en­ti­ty said, “Sim­ple things such as pay­ment for Mi­crosoft or Sage or oth­er soft­ware ser­vices re­quire use of a cred­it card. With re­duced lim­its, it is more dif­fi­cult for SMEs to af­ford these ser­vices.”

An­oth­er small busi­nessper­son re­it­er­at­ed that the abil­i­ty of SMEs to pay their for­eign sup­pli­ers in a time­ly man­ner is no longer pos­si­ble, not­ing that re­la­tion­ships that were built up over years of do­ing busi­ness are start­ing to fray giv­en the cur­rent lack of forex. As a re­sult, she said, lo­cal com­pa­nies are get­ting bad cred­it rat­ings.

In the area of elec­tron­ics, one medi­um-sized busi­ness said it has been forced to on­ly bring in the “es­sen­tials” for this Christ­mas like lap­tops.

Oth­er items such as home stereo sys­tems and toys will not be brought in be­cause they can­not af­ford to do so.

The forex chal­lenge has al­so af­fect­ed the used-car busi­ness.

Pres­i­dent of the T&T Au­to­mo­tive Deal­ers As­so­ci­a­tion Visham Bab­wah said, “The re­cent cut in the forex from Roy­al Bank is hav­ing a dev­as­tat­ing im­pact on the au­to­mo­tive in­dus­try. We are un­able now to even im­port equip­ment. Be­sides bring­ing the cars in­to the coun­try, we must have the up-to-date equip­ment to ser­vice and to re­pair these cars.

“You have a very small lim­it now of US$2,000... Some of these cars are mod­ern cars so cer­tain parts can­not be re­paired. We have to im­port parts like sen­sors and every­thing we re­quire for hy­brid elec­tric and these mod­ern ve­hi­cles even the mod­ern gaso­line cars. What is hap­pen­ing now is we can­not have an in­ven­to­ry of spare parts,” Bab­wah ex­plained.

These con­straints, mean that the cus­tomer has to wait un­til the re­quired part is shipped, ren­der­ing peo­ple un­able to use their ve­hi­cles for that pe­ri­od in some in­stances.

“Some­times the part might take longer to come be­cause of ship­ping con­straints we al­so have. We might be cour­te­ous to lend the cus­tomer a car for a week or two but it is un­ten­able. We can’t do this for every­body and every­body would be fac­ing this same is­sue in au­to­mo­tive in­dus­try,” Bab­wah added.

On whether im­port­ing few­er cars would al­le­vi­ate the forex sit­u­a­tion, Bab­wah was adamant this had noth­ing to do with im­port­ing ve­hi­cles say­ing, “I hear peo­ple say­ing, from time to time, that we should im­port few­er cars but that has noth­ing to do with the tech­ni­cal as­pect of it...The re­pairs, train­ing, the new equip­ment, all these are things that are be­ing neg­a­tive­ly af­fect­ed.”

To ad­dress the sit­u­a­tion, Bab­wah called on the Cen­tral Bank, the Fi­nance Min­is­ter and the com­mer­cial banks to ex­am­ine their re­spec­tive poli­cies and en­act the nec­es­sary changes to bring about a much need­ed re­prieve.

Bab­wah is al­so ad­vis­ing there be a meet­ing with all stake­hold­ers.

“When and where there is a stake­hold­er meet­ing of course you know some­times they in­vite spe­cif­ic groups. I would like all the groups to be in­vit­ed and let us have our say so then they can have a true pic­ture and un­der­stand what is hap­pen­ing and this meet­ing needs to hap­pen AS­AP be­cause peo­ple are suf­fer­ing for no ap­par­ent rea­son or for things that could be avoid­ed,” Bab­wah em­pha­sised.