By: Satesh Sookhai

In Trinidad and Tobago, like many Caribbean economies, entrepreneurs are more than sideline actors; they are central to employment generation, innovation, and economic development in these nations [1,7]. In small island states where large-scale industrial sectors are limited, small and medium-sized enterprises (SMEs) carry a disproportionate share of economic dynamism. It is therefore concerning that many entrepreneurs are now facing a constraint that goes beyond access to capital: access to the ability to transact internationally.

Across Trinidad and Tobago, persistent shortages of US dollars (USD) have made it harder for businesses to secure foreign exchange for imports [8]. At the same time, tighter credit card limits and restrictions on foreign transactions have reduced entrepreneurs’ ability to pay overseas suppliers, purchase raw materials, subscribe to international software platforms, or restock specialized inventory. These constraints are unfolding in an environment already characterised by high import duties and online purchase charges [5]. For entrepreneurs who rely on imported inputs, whether physical goods, packaging, replacement parts, or digital services, the combined effect is significant. Delays, higher transaction costs, smaller order volumes, and lost supplier relationships are becoming part of the operational landscape. What emerges is not a liquidity problem. It is a transaction capacity problem.

When systems narrow opportunity sets

Entrepreneurship research has long emphasized resilience, creativity, and opportunity recognition [6]. Yet recent work in the Journal of Business Venturing Insights reminds us that entrepreneurial outcomes are not determined solely by individual agency, but also by the structure of monetary systems. The JBVI article “Overcharged or fair play? Exploring interest rates and profitability in debt-based crowdfunding” by Ghasemi et al. [3] offers a relevant lens. The authors show that financing systems usually rely heavily on probability-of-default models when allocating resources. However, they demonstrate that incorporating profitability-based assessments can lead to fairer pricing and improved efficient allocation. The wider implication is powerful: how financial systems measure and gatekeep access matters, and narrow screening procedures can unintentionally restrict viable ventures [3]. While the Trinidad and Tobago case is not about crowdfunding interest rates, the underlying insight travels well. When access to USD is rationed, and credit card channels are tightened without differentiation, viable entrepreneurs may be constrained alongside speculative or non-essential activity. In both cases, the issue is not simply “risk,” but how systems allocate scarce financial resources.

Localization by necessity, not by strategy

When entrepreneurs are unable to transact abroad reliably, planned modifications follow. Businesses may reduce product variety due to import uncertainty, postpone technology adoption, substitute lower-quality local inputs, scale down international ambitions, or shift toward informal, higher-cost payment channels [8]. Over time, this produces a form of localization by necessity, rather than localization as a competitive strategy. For a country actively discussing diversification and private-sector growth, this raises a tension [4]. If entrepreneurs are expected to innovate, export, and scale, then the financial and payment infrastructure must expand their options, not narrow them.

A systems-level question

The growing USD shortage in Trinidad and Tobago is forcing a broader policy conversation [2]. Entrepreneurs are central to economic vitality; if transaction barriers constrain their capacity to function, then growth narratives must take these structural frictions into account. Ghasemi et al.’s [3] paper reminds us that financial systems can be designed to assign resources more intelligently. Translating that spirit locally highlights the importance of more targeted mechanisms to prioritize business-essential foreign transactions, diversified and credible alternative financing channels, and continued modernization of cross-border payment systems. Entrepreneurship under constraint is still entrepreneurship, but it becomes a different game. When the bottleneck shifts from “access to ideas” to “access to USD,” strategy narrows, innovation slows, and risk-taking becomes more conservative [8]. In small Caribbean economies, where entrepreneurs already operate within tight margins, expanding rather than restricting their transactional capacity may be one of the most important economic development questions of the moment.

Read the paper by Ghasemi et al. (2024) here: https://www.sciencedirect.com/science/article/abs/pii/S235267342400060X?via%3Dihub

References

1. Bahaw P, Forgenie D, Sadiq G, Sookhai S. Generative AI for business sustainability: Examining usability, usefulness, and triple bottom line impacts in small and medium enterprises. Sustainable Futures. 2025;10:100815. https://doi.org/10.1016/j.sftr.2025.100815
2. Bobb A, Sonnylal L. Assessing the exchange rate pass-through to inflation: The case of Trinidad and Tobago. Working Paper WP 01/2018. Central Bank of Trinidad and Tobago; 2018. Available from: https://www.central-bank.org.tt/cbtt_storage/pdf/compilation-of-working-papers%20-december2020.pdf
3. Ghasemi A, Nouri BA, Fadaei M. Overcharged or fair play? Exploring interest rates and profitability in debt-based crowdfunding. J Bus Venturing Insights. 2024;22:e00508. https://doi.org/10.1016/j.jbvi.2024.e00508
4. Inter-American Development Bank. Development challenges in the Caribbean. Caribbean Region Quarterly Bulletin, Vol. 7, Issue 3. 2018. Available from: https://publications.iadb.org/
5. International Trade Administration. Trinidad and Tobago – Import tariff. U.S. Department of Commerce; 2024. Available from: https://www.trade.gov/country-commercial-guides/trinidad-and-tobago-import-tariff
6. Mohan PS. An investigation into entrepreneurial intentions in Caribbean small island developing states. J Innov Entrep. 2022;11:60. https://doi.org/10.1186/s13731-022-00253-0
7. Sookhai S. The impact of reward frequency on employee motivation: A comparison of cash vs. tangible rewards. Proc Acad Latin Am Bus Sustain Stud. 2024;2:44–52.
8. Trinidad and Tobago Chamber of Industry and Commerce. The foreign exchange challenge. 2025 Dec 8. Available from: https://chamber.org.tt/wp-content/uploads/FEX/FINAL-CHALLENGE-FX-Dec82025.pdf