Happenings in the MSME Eco System

Our Banking partner, First Citizens Bank, is one of the first financial institutions to use the new and improved Enhanced Credit Guarantee Fund.

According to a recent release issued by the Inter-American Bank (IDB), over 200 businesses have been projected to benefit. Backed by a BDS$70 million loan financed by the IDB and executed by the Central Bank of Barbados, the fund was created to assist small and medium enterprises.

Incorporated business entities from any sector can use the fund to guarantee up to 80% of their loan and up to a maximum of BDS$2 million per guarantee. The fund can be used to finance the purchase of land and buildings, equipment and machinery; the expansion and improvement of infrastructure; the implementation of new technology, techniques and processes; and to increase permanent working capital, which is tied to an investment operation.

 

Senior Manager with First Citizens, Kaye-Anne Brathwaite said the Bank is always looking for ways to help its customers. “At First Citizens, we put the customer first, we saw that the Enhanced Credit Guarantee Fund had the potential to help some of our small business clients. We are very pleased with the system as it is very straight forward and being online, we are just required to enter the information.  I am particularly satisfied with the fast turnaround time for the loan approval, it’s fast, transparent and easy to register,” said Brathwaite.
First Citizens’ Lending Officer, Omolara De Riggs-Morris admitted that it is sometimes harder for some SMEs to get loans because they often lack the collateral required by the financial institutions.  She said the fund would make applying for loans easier for this group. “In Wade’s (Rene Wade of Motofitt Inc. is bank’s first client to receive a loan using the fund as collateral) case, he had very good accounting information, so the process was easy. Small businesses need to maintain proper accounting records because this is one of their primary requirements when applying for a loan,” De Riggs-Morris said.

IDB Team Leader Eduardo Sierra said that all financial institutions could participate in the fund.  “We launched this fund in February, and there has been skepticism by the financial institutions emerging from their previous experience with other guarantees schemes. We are, however, pleased that First Citizens and RBC has placed their customer's interest first and have used the fund which will help to improve productivity, employment, and the economy of Barbados. We would like to commend these two financial institutions for leading the way to empowering the business and entrepreneurial community,” Sierra said.

Credit: Extract from an Inter-American Development Bank Press Release