Courts to the rescue

Micro and small businesses in Barbados now have another option from which to access financing.

Unicomer (Barbados) Limited, which trades as Courts, is now offering microloans by Courts Ready Cash, which provides these enterprises with up to $20,000.

The move by the furniture and appliance retail giant to extend its services has been lauded by Executive Director and Acting chief executive officer of the Sagicor Cave Hill School of Business and Management Professor Dr Justin Robinson, who maintains that small and micro businesses do not have the necessary access to financing in Barbados.

Delivering the feature address during the official launch at the Hilton Barbados Resort this morning, Dr Robinson said data showed that those businesses found it difficult to secure loans.

He said according to the most recent Global Competitive Report, Barbados’ financial system received a rating of 71.3 out of 100, ranking it 35th out of 141 countries surveyed.

However, with regards to the financing of small and medium-sized enterprises, Barbados scored just 31.3 out of 100, while in terms of the availability of venture capital, the island scored only 17 out of 100, ranking it 132nd.

“While we are near the top of the class in terms of the overall financial system, in terms of accessing financing for small and medium-sized enterprises, 31 is an F everywhere,” Dr Robinson pointed out.

“So the consensus is that while we have a well-developed and well-functioning system of financial markets, the access to financing for small and medium-sized enterprises is the major weak point in the system.”

The university professor said Courts’ decision to move into the area of microfinance was significant.

He explained that commercial banks were not necessarily interested in business in that sector as it “did not fit their model”.

Dr Robinson said Courts was adding diversity to the financial sector.

“Courts’ foray into this area is one of the latest developments in the rise of microfinance and further attempts to disrupt the financial sector. I see this as an important move in Barbados as we add some needed diversity to the financial systems.

“Barbados has what we would call a bank-dominated financial system. Banks are by a long way the dominant financial player and I think our banks have served us well and they are world-class in what they do. But, the nature of banks and their business model means that they are a number of potential borrowers and products and types of projects that are going to be underserved in a financial system that is dominated by banks,” Dr Robinson said.

“I think the way to address that is not to beat up on the banks and not to force banks into areas that don’t fit their competencies or business models, but to incentivize the diversification of the financial system by having new players come in with products and offerings to serve the underserved.”

Managing Director of Courts Barbados Limited, Trisha Tannis said the company’s newest initiative is aimed specifically at helping small and micro-businesses.

She said in the current challenging environment brought about by the COVID-19 pandemic, those businesses were in need of assistance now more than ever.

Vashti Ince, Director of Credit at Courts revealed that its newest financing option was easy, no-hassle and required no deposit.

Additionally, she explained that interest rates offered would be competitive and would reflect the risk. She said each person would be assessed on “a case-by-case basis”.

Ince said financing was available immediately and customers had already expressed interest.