The Barbados Trust Loan Fund Ltd (BTLF) has slowed the disbursement of loans to small business people as the fund tries to collect from those who have already benefitted.
However, General Manager of the collateral-free $10 million fund Jerry Amos is giving the assurance that the fund is still healthy despite the “backlog”.
The BTLF, which officially opened on November 5, 2018, provides loans of up to $5000 in the first instance to qualifying applicants, with an opportunity for them to borrow twice that amount upon successful repayment of the initial loan.
So far, the BTLF has just over 2,700 clients with a portfolio of over $12 million.
Giving an update on Tuesday on the fund’s performance, Amos said there were still about 1,300 on the waiting list for loans and those receiving advances were yet to finish repaying.
Amos explained that it was now a case where the fund has “slowed down” on granting loans to concentrate on recovering.
“We have not yet started to disburse the $10,000 loans. We are hoping [for] instructions from the Ministry [of Small Business and Commerce] and our board that by some time in the first quarter of next year that we would start disbursing the $10,000. The reason behind that is we are very deep in the backlog of loans and we don’t want to go ahead and honour the $10,000 before we have satisfied the backlog that has requested $5,000,” he said.
“What we have done is that we have concentrated a lot on trying to recover the fund because it was pitched as a revolving fund. So we are appealing to those who received the funds to actually start their repayments. From the month of November we have been putting a lot of effort into recovering those funds,” he said.
Clients were given a six-month grace period before they were required to start to repay the loans, which meant that the first set of people who received loans in November when the loan started would have been required to start making their repayments in June 2018.
At the end of May, Trust Loan Steering Committee Chairman Dr Clyde Mascoll had already issued a warning to borrowers to start making their repayments, adding that there were some who did not expect to repay.
“But I can tell Barbadians, there is no way we are going to tolerate using taxpayers money for people to come and access and don’t repay. So, you will be pursued if you don’t repay,” Mascoll warned at the time, though stopping short of saying whether Government would take defaulters to court.
Amos said despite the slow pace of repayment the fund was not experiencing challenges and he was confident that with financial management and literacy training, loan recipients will make their repayment.
“At this time the fund is okay. The Government of Barbados has committed to having the fund active and supporting the micro business sector. So I would say yes, the fund is healthy,” he said, as he responded to questions during the official launch of a partnership with Cave Shepherd Card Services.
“I wouldn’t say at this time there are challenges, but what I do know is that to avoid challenges going forward we need to put things like the Cave Shepherd Card Services in place so that people have options so they don’t have to walk down to the BTLF,” said Amos.
Under the new partnership, small business owners who qualify for a loan from the BTLF would receive a Cave Shepherd Card with pre-loaded funds.
In addition to existing methods of repayment, the clients will have the opportunity to repay the loan through a mobile transfer using the mobile app directly to the BTLF mobile account or by visiting the Cave Shepherd Bridgetown location.
Stating that the partnership was “a step in the right direction”, Amos said it would allow for easier and quicker repayment, saving business operators time.
He said some 1,300 clients were trained in different aspects of business management, and about 95 per cent of the requests made over the past year were for the full $5,000 loan.
“A lot of persons do want to request more. Actually, we do have requests that actually amount to more than $5,000 but we know what our mandate is and we stick to the $5,000 disbursement,” he said, adding that he was satisfied that those benefitting from the loans were able to achieve what they set out to do.
The bulk of the loan requests from the 2,700 recipients over the past year were from the services sector, followed by retail and agriculture. The recipients were mostly female.