Cuban Anti-Cash Policies Damage Small Business Prospects
A range of government policies aimed at pushing Cubans towards cashless payments are ‘alarming’ for entrepreneurs and have encouraged some businesses to go cash-only for fear of losing access to the physical money vital to their operations.
We recently reported on the damaging effects of the new policies on Cuban citizens’ privacy, choice and financial control , and a new Reuters report focuses specifically on small businesses already struggling with the fallout. It notes the ‘most alarming’ measure is a 5,000 peso ($200) daily cap on cash withdrawals for businesses.
Reuters spoke to Yulieta Hernandez, the founder and manager of Pilares Construction, and she explained that while she has already adopted electronic banking, she often needs rapid access to cash to respond to emergencies arising on job sites. She added that many of her suppliers have stopped accepting cashless payments entirely—the opposite of what the new policies sought to achieve.
This is our money. Right now, the effect... is like paralysis. People are waiting to see... if a solution is found for the problems [the new rules have] created.
Reuters says the business owners it spoke with were concerned the government measures will ‘dampen enthusiasm for investment in private businesses that sell food, fix cars, build houses and provide other goods and services where state-run enterprises have faltered.’
Like Hernandez, Ronald Venero, a Havana-based street vendor of fruit and vegetables, says his suppliers—farmers from outside the city—are neither willing nor able to shift to cashless payments. He and others like him are at risk of being cut out of the economy entirely, unable to operate their businesses, which provide vital services to their fellow Cubans.
The farmers who come to sell us merchandise deal in cash. You tell them you are going to pay by card or a transfer and they tell you no.