Collateral registry to make it easier for small businesses to get loans
Article taken from the Barbados Today – Wednesday 23, February 2022
Member of Parliament for St Michael East Trevor Prescod is calling on the Government to be assertive in getting banks and other lending agencies to make it easier for small, micro, and medium-sized businesses to access loans.
And acknowledging that some businesses need help in this area, Minister of Energy and Business Development Kerrie Symmonds disclosed that Government is working on developing a collateral registry that would make it possible for persons to register tangible and intangible assets as security to enable them to borrow money.
Making his contribution to the Appropriation Bill 2022 in the House of Assembly on Wednesday, Prescod said arrangements needed to be made with financial institutions to assist small business owners who may not have the security to access loans but may be able to show evidence of a successful business record.
Prescod said too many small businesses are left struggling when they run into difficulties because they can’t get their hands on needed finances.
He accused banking institutions of coming to Barbados to make large profits without having any great interest in the development of the country.
“I know we don’t have any Barbados National Bank institutions like before .
. . but we can be a little more assertive, especially when young men and women run into some difficulties. Because most of the time when a man invests a little $5 000 or $10 000 in a business, in the early days he also takes out what he considers as profit, which is no more than some cash to replace the stock.
“He takes it out and utilises it and you see the stock diminishing at a rapid rate and then he has no money in the banking system. But can they make arrangements with the banks that if somebody has a long historical record of success, although they don’t have capital available, some new forms of analysis are applied?” Prescod said.
In response, Minister Symmonds said that while Minister of Finance Prime Minister Mia Amor Mottley was responsible for interfacing with financial institutions, the performance of banks as it relates to the treatment of poor people in Barbados must be confronted for the sake of development.
He said the collateral registry that is in the works would allow the Government to create a new theatre of activity and opportunity for businesses in Barbados and business people who are unincorporated to be able to provide financiers with security to hold on to in exchange for loans.
“It falls to us in the Ministry at this time to find a solution. I believe that the collateral registry discussion is now far advanced. I am happy that the alignment of the Ministry is now such that the corporate registry falls under our umbrella. I sit at this meeting with two permanent secretaries as party to a discussion that we had with the Registrar of Corporate Affairs only a few days ago, not in preparation for this meeting, but in advancement of the work of the collateral registry,” the senior minister said.
He added that while there may currently be “a little daylight” between the parties as to how the registry would be achieved “the daylight is diminishing rapidly”.
“I am pleased to say that this is a work in progress. I anticipate that within the next three months or so we should be able to have worked through all of the technical difficulties that we have,” Symmonds said. (AH)