Minister of Small Business, Entrepreneurship and Commerce, Dwight Sutherland during his address.
Entrepreneurs who often found it difficult to attain necessary funds from financial institutions, will soon receive much needed help from Government, as the present administration seeks to reinforce the sector for future investments.
This word came from Minister of Small Business, Entrepreneurship and Commerce, Dwight Sutherland, as he delivered brief remarks at a mix and mingle event organised by the developmental financing agency, Fund Access.
The problems around credit scores for micro, small and medium-sized enterprises (MSMEs), has not gone unnoticed by the Minister, which is why there will be the establishment of two agencies to help lenders, and borrowers, in this regard.
“The establishment of a credit bureau would enable creditors to easily access information such as credit reports and credit scores on borrowers which should serve to make lending decisions easier for the lenders and to the benefit of potential borrowers. It may serve to significantly reduce to the borrower, the time period between when he or she applies for a loan and when he or she receives notice with respect to whether he or she qualifies for the loan or not. The Government will also shortly be establishing a collateral registry. This will be a web-based system that will allow for the registering of charges and collaterals created by entrepreneurs that may be used as security when applying for credit facilities provided by lenders,” Sutherland explained.
He further outlined, that it will be his ministry’s aim to not only provide financial aid to these potential business owners, but financial education as well.
“As we take a broader view of things, it is recognised that a critical area of focus should be on education and as such, the Ministry is in the process of designing a national strategy for financial education and literacy. This objective is a long-term policy priority for this Government. Financial literacy is an important tool to imsprove entrepreneur’s financial knowledge and behaviour. It is integral to the longevity and success of any business. This is not only with respect to the financial management of a business but also the enhanced capacity it allows for entrepreneurs to effectively interact and negotiate with agencies in the financial sector or any other type of creditor,” he added.
Recognising one of the main issues facing the economy on the island is the lack of invest by overseas creditors, Sutherland says that changes are on the way, as the Ministry and other stakeholders seek to create greater interest in local MSMEs.
“Currently, the Ministry is in discussion with key partners to make equity financing available to requisite businesses as a viable financing option for their businesses. One such partner is the Central Bank of Barbados which manages the enhanced credit guarantee scheme. This enhanced scheme is an innovative financial tool designed to assist SMEs by providing a guarantee mechanism to support investment projects. It is backed by a BDS $70 million loan financed by the Inter-American Bank (IDB). To date it has been of benefit to several Barbadian companies including Good Times Snacks and Innotech,” he said.