Development bank’s efforts to collect outstanding payments paying off

Bahamas Development Bank (BDB) Managing Director Dave Smith said the bank anticipates its rate of delinquency to dramatically decrease by the end of this year, due to the “vigorous” efforts it has been making to collect outstanding payments. 

Speaking to reporters at the bank’s launch of its Warren Logan Rolle Apprenticeship Program yesterday, Smith said, “With regard to delinquencies, we are continuing our vigorous process, certainly, of contacting those clients in the first instance, trying to get to amicable arrangements and then of course where we can’t see that working we take it to the next level… legal action.”

He added, “You’re looking at about roughly $16 million outstanding and some of this goes over many, many, many, many years so it’s also an exercise in cleaning the books as well.”

Smith was appointed managing director of the bank in August 2018. Prior to his coming onboard, the bank had previously reported that 65 percent of its loans were non-performing. 

“By the end of the year we probably will be at about 25 percent because of the particular action that we’ve taken.”

He added, “But we’re working with the clients, reaching out to them, trying to get them to make arrangements with the bank to settle the obligations.”

Noting that the process has been an ongoing one, Smith said: “In some cases clients would have actually even died in the process, so it’s been around for awhile.

“When a client dies, most clients have an estate, depending on how they died.

“So where we would have taken legal action, typically there might be a writ and so when the estate is settled, the bank would be satisfied.”

He also elaborated on BDB’s continuing efforts to expand the industries it’s involved in. 

Ahead of this year’s Abaco Business Outlook, Smith had noted that the bank was looking at changing the legislation that directs it, in order to expand the types of industries it can develop. 

“We’re continuing to do that and this is why our apprenticeship program was also extremely important,” he said. 

“So in terms of other industries, et cetera, we are focusing on sustainable development goals.

“When the bank started in ‘74, there were what’s called under the legislation ‘enterprise areas’ which included agriculture, tourism, manufacturing, et cetera. Technology has been added to that and services and so that broadened the scope and focus of the bank.

“But moreover we are a financial institution, but a development financial institution, where our focus is really sustainable development goals and impact, not necessarily credit extension and the like.”

Under the apprenticeship program, BDB sponsors a high school graduate from The Bahamas to attend the University of The Bahamas for a four-year degree. Chosen apprentices will be given the opportunity to work at BDB in a paid position and gain exposure in business and finance-related areas, furthering their skills development.

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