SME Financing Data Initiative

Consultative Process

The work that this initiative implies involves a number of stakeholders, and consultations with them has been a key part of our work plan. Our approach is based on two rounds of consultations. In the first round, the partners set out a vision and sought feedback on several objectives and how they might be achieved, and aimed to build consensus on the overall approach and framework. Consultations were held with various groups that have a stake in the state of SME access to financing in Canada, such as organizations representing SMEs, providers of SME financing and their associations, as well as government organizations.

The partners of the initiative presented a discussion document to stakeholders outlining the partners' vision, objectives, and plan for the initiative. The partners remained open to innovative ideas throughout, as the intention was to obtain stakeholders' views and opinions on what was proposed in order to determine the initiative's feasibility, as well as the most cost-efficient and effective manner of meeting objectives for all those involved.

The second round of national consultations, planned for June 2000, will validate the changes made to the original proposed plan according to the feedback received during the first round with stakeholders. In addition, it will define the details of this initiative with those affected by the work that it entails, in order to implement a sound approach.

Results of First Round of Consultations

More than forty firms, organizations and individuals were invited to participate in this first round of consultations, and almost thirty participated in the fifteen meetings held across the country in Montreal, Québec City, Toronto, Vancouver and Ottawa. The partners also held more detailed discussions with key stakeholders on the pilot demand-side survey questionnaire.

There was general support for the initiative. There was general agreement that there is a need for better information, and that the initiative is timely, given that information systems changes required for Y2K are completed, which frees system resources to make any needed changes.

Key stakeholders reserved any final commitment to the process until they see the technical details of the proposals in the second round of consultations. In addition, some key issues were raised:

• Some organizations expressed concern over the length and complexity of the pilot demand-side survey questionnaire, as well as the lack of questions leading to qualitative data
• Given the complexity of the requested data elements, the clarity of terms is an important issue, as was brought up by stakeholders
• Information on a provincial or national level is less useful to some stakeholders whose markets are localized. These organizations have asked for a regional segmentation
• Some organizations expressed concern regarding the amount of data that may be required, and the possible resulting response burden

Initial Responses to Concerns Raised

The comments dealing with the length and complexity of questionnaires were addressed in subsequent drafts of the pilot demand-side survey questionnaire, which was shortened, simplified, and strengthened in questions regarding qualitative data such as the issues surrounding the SME experience of obtaining financing. The results of the pilot will be used to further shorten and simplify the questionnaire for the full survey, as needed.

In an attempt to address the issue of complex data elements, the partners are currently working with stakeholders to develop definitions that will ensure respondents understand the information that is asked of them and enable them to answer accordingly.

In response to the organizations who have localized markets, the initiative partners is exploring the possibility of providing segmentation at a level that will be useful to all stakeholders. Clearly, the response burden and the protection of confidentiality are issues here, as are the implementation challenges.

The partners are attempting to address the compliance burden concern through a number of measures. Firstly, the demand and supply-side approach to the surveys and studies is being proposed to alleviate the compliance burden by sharing the data collection responsibilities between the demand and supply sides. The partners hope to achieve this by requesting some data elements from only one side rather than both, when possible, to then amalgamate the elements collected by both sides to complete the picture of the state of SME financing. Secondly, the agenda has been laid out over a 5-year period to give stakeholders the needed time to adapt their systems and procedures to capture the needed information. These issues will be further discussed in the second round of consultations.

Consultations: Round 2

The upcoming second round of consultations will provide stakeholders with the opportunity to respond to the details of the proposed plan, and to provide the initiative partners with ideas as to how the work plan can be more efficiently and effectively implemented, in a manner that will suit their needs and alleviate their concerns.

As their views are crucial to the success of this initiative, stakeholders will continue to be involved throughout the design and implementation phases.