More than 5,000 micro, small and medium-sized enterprises (MSMEs) form part of Cuba’s economic fabric today, a year after the country gave the green light for their creation.
The economic crisis that the Caribbean island is currently experiencing, the most serious in the last 30 years, is evident in all areas, but many new private entrepreneurs interpret this scenario as an opportunity.
“Since there are so many shortages, any business that emerges will find a space,” claims economist and private entrepreneur Oscar Fernández, a partner of Deshidratados Habana, a venture that has managed to become the preference of many in recent years.
“Stereotypes are giving way. The private actors that today are new enterprises are being treated on equal terms by state-owned enterprises. I note that we are signing contracts, that we are interacting, but there are still many issues to be resolved, for example, access to financing mechanisms.”
Oscar explained to Negolution that although Cuban banks offer financial products for working capital, including for investments, “The procedures are still cumbersome. But they are getting easier compared to other times. However, for hard investments the mechanisms are still difficult, and almost all businesses need capital investment for equipment that has to be imported.”
Of the more than 5,000 MSMEs established in Cuba, in the last 10 months some 300 applied for microcredits to Financiera de Microcréditos S.A., an entity created in December 2021 “In response to the need for these actors to be inserted in the economic scenario of the country,” as stated by the authorities at the time. Hopwever, only 11 have seen these credits materialize.
Ayamis Lozada, director general of Finanicera de Microcréditos S.A., acknowledged that they had the expectation that by now, “There would have been more economic actors financed.”
“We have actually been able to arrange 11 loans for more than half a million pesos (in dollars), because now is also a time when these economic actors are reorganizing, and they are organizing themselves with all the requirements of the business sector, with their accounting and financial organization, their knowledge of how to use the credits,” she explained.
Financiera de Microcréditos S.A. has a fund of 2 million pesos in freely convertible currency (MLC) to finance these economic actors with export possibilities, sales in MLC retail stores, or at the Mariel Special Development Zone, as well as those related to tourism, a figure that falls far short of the real needs of new Cuban private entrepreneurs.
“The issue of obtaining funding sources in hard currency is still really hitting us,” explained Losada. “We have some interest from the European Union, there are agencies that intend to create funds for development, but it is really complex to obtain this type of currency and to be able to lend it. Today we remain a victim of the blockade against our country.”
The Cuban government assures that the objective of providing financing in foreign currencies, although still limited, is to accompany the economic actors that meet the established conditions, so that they become dynamic, grow and other entrepreneurs that need to enter the market can be incorporated.
