Business community speaks on funding for SMEs
Business leaders in the country expressed their views on efficient ways to access funding to support current and new entrepreneurs, with some of their commentary being considered to form legislative framework.
Several members of the business community participated in a one-day seminar hosted by the Bahamas Development Bank(BDB), which looked at strategies to improve the ability of business owners to acquire capital for their establishments. The seminar was held last month at the British Colonial Hilton.
Owner of Mario’s Bowling and Family Entertainment Palace, Leslie Miller, said the greatest challenge facing small and medium-sized enterprises is gaining access to funding. According to him, public institutions geared towards assisting them such as the BDB, the Bahamas Agricultural and Industrial Corporation(BAIC)and the Venture Capital Fund, have”been less than stellar over the years.”Miller, also a former minister of trade and industry, suggested that more emphasis should be placed on providing monetary assistance in the form of loan guarantee programs to qualified businesses, in addition to the creation of legislation focused on business-friendly statutes to support SMEs.
President of Superwash and former President of the Bahamas Chamber of Commerce Dionisio D’Aguilar shared the same views as Miller, saying the creation of some type of loan guarantee scheme is necessary. He mentioned that before the seminar he didn’t see the need for public funding institutions like the BDB based on their performance, but understood their importance after attending the seminar.
“If BDB gets money to empower Bahamians, and lends it to them, there must be a plan to sustain BDB,”noted Jerry C. Butler, the executive director and CEO of Global Equity Consultants Limited.”Which means the loans have to be paid back, or there must be a plan to get additional funding, and to do off balance sheet transactions for people who could pay.”
Providing a perspective from the banking sector, Senior Manager of Business and Strategic Planning at the Bank of The Bahamas Hubert Edwards said he had several concerns about various government-operated institutions that are designed to assist SMEs. He mentioned that the BDB has an opportunity to”re-invent itself”and more flexibility should be placed into such initiatives so they can become self-sustaining.
The BDB is improving in the loan repayments department, with Acting Managing Director Anthony Woodside saying there has been a noticeable drop in delinquent accounts so far this year. According to the bank’s 2009 annual report, its non-performing loans outpaced its performing loans during the audited period, with loan interest income recorded at$2.5 million for 2009, down from$3.2 million in the previous year.