The Small Business Association (SBA) is calling for the inclusion of credit unions in the government programme to make it easier for small businesses to access funding.
Credit unions are not among financial institutions involved in the $70 million Central Bank-administered Enhanced Credit Guarantee Fund launched approximately eight months ago.
SBA Chief Executive Officer Lynette Holder yesterday said the credit unions ought to be allowed to issue funds under the programme.
“The Small Business Association has called for the credit unions to be included in this particular fund . . . yes, there are several financial intermediary organizations that have been identified and we are pleased that First Citizens Bank has been one of the first to be able to access the Guarantee Fund for the sector.
“But we are calling for credit unions to be also included on the list of approved intermediaries that the sector can go to and that those credit unions can also access that Guarantee Fund to provide the funding to micro, small and medium-sized enterprises,” Holder said in an address at the official launching of Small Business Week 2016, which is scheduled for September 18 to 24.
The programme is being financed by the Inter-American Development Bank and the China Co-financing Fund for Latin America and the Caribbean.
It provides loans of up to $2 million to small and medium-sized enterprises (SMEs) with no more than 20 employees and annual sales or total assets not exceeding $20 million.
Issuing financial institutions include commercial banks, Consolidated Finance Company Ltd, Globe Finance Inc, Signia Financial Group Inc, Capita Financial Services Inc and Citicorp Merchant Bank Ltd, which is also responsible for setting the interest rates.
Chief Executive Officer of City of Bridgetown Credit union Steve Belle agreed that credit unions should be involved in the loan scheme, telling Barbados TODAY small business owners comprised a large number of its membership.
“When the fund actually came out we lobbied for it but they said it was only relevant for commercial banks, which we thought rather strange. We are hoping that the Minister [of Finance] will take the advice of what the CEO of the SBA is saying, and what we have been calling for since the fund has been launched – to actually allow credit unions to be part and parcel of this initiative,” Belle said.
Late last month, Minister of Industry, International Business, Commerce and Small Business Development Donville Inniss told Barbados TODAY the programme had been performing below par, with a less-than-favourable uptake,.
As a result, Inniss said at the time, the fund was being reviewed with the aim of expanding the number of lending institutions involved.
Small Business Week 2016 will kick off with a church service and include a range of activities, including a T20 cricket match, a youth forum, bus tour and promotion and stakeholders’ forum, and will culminate with an awards ceremony and reception.