By Gerrino J. Saunders
Journal Staff Writer

The easy access to business loans has been the cry from budding It has been a long
and entrepreneurs and established small and medium sized business owners looking to
expand. Accessing capital from commercial banks seems almost impossible when
compared to the relative ease to qualify for a consumer loan to purchase a vehicle or
take a vacation. The Davis administration is taking steps to reduce many of the
challenges in this regard.
Prime Minister Philip Davis initiated the second reading and passing of a compendium
of 10 bills related to the Moveable Property Security Interest Bill in the House of
Assembly this week.
He said a Central Bank diagnostic report confirmed the status quo does not support the
need of today’s entrepreneurs and that the new legislation will help small, medium and
large businesses have greater access to capital.
“We have before us an opportunity to help Bahamian entrepreneurs gain access to the
credit funding and financing, they need to realize their dreams,” said the Prime Minister.
Continuing he said, “we are opening the door for more Bahamians to secure loans and
pursue success. This Bill represents a departure from the way loans are typically
secured in our nation. Currently the vast majority of financial institutions typically accept
immovable property (land or real estate) as a form of collateral to secure loans, and for
a majority of local businesses this reality has made it very difficult to gain access to
credit to scale up their businesses”.
According to the government the new legislation will allow business owners to use
assets like machinery, equipment, inventory, accounts receivable, vehicles and even
intellectual property as collateral when applying for loans.
Mr. Davis said the government will also attempt to address other obstacles and like
unfair policies blocking access to capital from commercial banks.
He said, “access to capital has been further limited by the increasingly conservative and
extremely risk adverse approach that regional banks have taken over the past several
decades.
“Businesses too often fail to qualify for loans or qualify for much less than they really
need. This old way of doing business is far too limiting, especially in the era of startups
and innovation.

“We believe in the talent of Bahamian entrepreneurs whose hard work and innovations
propel prosperity, which is why we work hard on policies and laws to support Bahamian
progress and success. This Act is part of our larger effort to change the rules and
constraints which have stood in the way of a more dynamic inclusive economy, one in
which more Bahamians can realize their dreams,” said the Prime Minister.
Mr. Davis said a regional report shows that collateral required to obtain a business loan
is often times more than 231 percent greater than the loan value, this in addition to high
interest rates, which he says is unfair to those seeking business loans.
He said this “archaic” way of doing business by commercial banks is far too limiting and
must change.
Deputy Prime Minister Chester Cooper seconded the Bill describing the new legislation
as revolutionizing access to credit by offering Bahamians the opportunity to leverage
movable assets as collateral, providing new opportunities for growth and innovation,
particularly for small and medium enterprises. Cooper also noted that the new
legislation supports the efforts by the Bahamas Venture Capital Fund, the Small
Business Development Centre (SBDC), and the Tourism Development Corporation.
He said, “we are not just focusing on startups; established businesses with steady
operations but limited cash flow also stand to benefit. They can leverage their tangible
and intangible assets to access loans that will enable them to scale their operations,
hire more workers, and contribute to our nation’s prosperity. They can empower
themselves, create wealth just like we promised we would support in our Blueprint for
Change.”
Kwasi Thompson the Shadow Minister of Finance led debate for the Official Opposition
stating that while the FNM supports the Bills there are some areas of concern.
Mr. Thompson said The Bahamas is facing a crisis in small business funding and ease
of doing business.
He said while the bill could potentially increase the types of assets that can be used
as collateral, the Davis administration has once again missed an opportunity to
enact impactful reforms.
“We continue to witness banks in our country piling on more fees and charges for
Bahamian customers while providing less and less customer service. While the
expanded range of movable assets as collateral might be beneficial, it does not
address the overly cautious lending practices of banks,” Thompson said.
The opposition expressed concerns over whether commercial banks will accept the
new wide range of assets as stated in the new legislation.
Mr. Thompson also raised concerns about the absence of the Small Business
Development Centre (SBDC) in the new legislation. He claimed the SBDC has
been largely under-funded under the Davis administration.
The Bill and its accompanying legislation was crafted by the Central Bank of The Bahamas, the Office of the Attorney General, the Ministry of Finance, and the
Ministry of Economic Affairs.