The Ministry of Trade & Industry is set to propose a $5 million dollar National Development Fund to further assist Bahamians in small business ventures.
According to Trade & Industry Minister, Leslie O. Miller, the proposal will be presented to the Cabinet for approval and funding will come from the National Insurance Board, the country’s social security scheme.
Idea for the funding came after the need for alternative financial support for small business owners, who have experienced hardships when applying for loans.
“We have, in fact been trying to increase our lending capacity from $10,000 to $25,000 because most small businesses are looking for amounts generally not exceeding $25,000,” he said. “You see, you have to really take an infant industry through the stages and hold it by the hand, and guide it. The Government has a mandate to do that.”
Minister Miller was a guest speaker on the Love 97 radio programme ‘Issues of The Day” on Monday, hosted by Jeff Lloyd.
Because the ministry operates in what he described as a ‘one-stop-shop’, BAIC will be the organisation chosen to carry out or regulate the fund, Mr Miller said.
He added that although this initiative will be provided, individuals need not bypass the Bahamas Development Bank (BDB) for financial aid.
In the past, both BAIC and the BDB have been scruntinised for their limited assistance to struggling entrepreneurs.
Noting this problem, Minister Miller said the two organisations just need to work in closer collaboration with each other so that when loans are approved by BAIC, they are sound proposals with some degree of success that the BDB would just process it.
Stating that BDB is not the “true” development bank that it should be, Minister Miller said this is due to the many delinquent loans the bank have battled with over the years.
In the past, the majority of loans approved were given to small businesses in the agriculture and fishing sectors. Approximately $10 million or more has been written off as bad loans by the bank.
“Bahamians have a tendency that once they would have procured a loan from the Bahamas Development Bank, they think it’s a freebie and it really is not,” he said.
BAIC previously had a Micro processing Loan initiative in the amount of $500,000 put in place. The purpose of the scheme was to give small loans to small business owners, who would have gotten contracts from Sun International who would have gotten purchase orders from respective government departments of up to $10,000.
The small businesses would request the amount from BAIC and BAIC would advance the funds to purchase the raw materials to enable them to satisfy the purchase order.
“Unfortunately what happened was that a quarter of a million dollars was loan out and that same balance is still outstanding,” he said.
The ministry is however, presently looking at re-implementing that programme, Mr Miller added.
Another main problem at BAIC is lack of space, he said. Therefore the ministry is seeking to secure residence of the old warehouse building on Prince George Dock, previously designated for the Straw Market.
This goal is among the many, which have been slated to make improvements at the government owned entity, Mr Miller noted.
“Within the next 90 days we should have BAIC back on track,” the minister said.
By Lisa Albury, The Nassau Guardian
