The world has been ranked according to the ease of doing business and we are towards the bottom of the list. The government is aware of this but has done very little to correct it. In fact, some of the policies and laws that have been implemented and enacted themselves contribute to this very low ranking.
Raising capital, especially for a local entrepreneur is one such example. If you apply for a business loan, the banks apply a debt to service ratio of up to 40%. That is, if you are paying more than 40% of your income or salary for debt servicing, than you are considered too high a risk for a loan. That’s fine, but the catch is that your credit card limits in full are sometimes used to determine that ratio regardless of how well you have managed your cards. To be fair, some banks are take that into account but many do not. We need a standard across all banks.
Another factor is the gymnastics involved in establishing your business. A business licence is required, as well as registration with Social Security. Sometimes incorporation is required and sometimes work permits are needed. A bank account and utilities are absolutely essential. We are not arguing that these licences are unnecessary, but rather that the processes involved can be more streamlined and easier to comprehend. There is no central registry, no data sharing. Each entity has its own requirements for its own original documents, many of which require notarisation and not just authentication. We are left to wonder why a lawyer is considered more truthful than we are, especially in light of recent revelations.
Slip up on your social security obligations and face fines of greater than 60% pa. on the unpaid amount. Some argue that this is intended to scare businesses into the straight and narrow path, but alas, it hasn’t always done so and sometimes drives business underground.
On top of all these is very poor customer service. Consider the experience of having to wait the return of the CSR from lunch because no-one else was there to deal with your issue. Then after being called into the service area, having to stand there and wait again while the said customer service representative – who called you in in the first place – completed a telephone enquiry. It is difficult to assess whether this was worse than doing banking during youronly available time, lunch hour, when most of the banking staff has been sent to lunch, and then being shut out of the bank by 2 p.m.
If we are to improve our ranking and attract the investors and entrepreneurs, we really must re-assess ourselves and do better.