Trade and Project Financing – Bahamas Business Guide

Business Guide

Bahamian banks tend to be far more conservative than their American
counterparts in making business loans, often asking for high levels of
collateral. At the end of 1996, the prime lending rate in The Bahamas
was unchanged at 6.75 percent. Commercial bank rates for residential
and commercial mortgages ranged from 10.06 percent – 10.87 percent,
respectively. Consumer loan rates were 14.69 percent.

The Bahamas Development Bank (BD) was created to assist Bahamians
in establishing new businesses or expanding existing concerns through
the provision of concessionary funding and technical assistance, for
projects which generate jobs and which contribute to the economic
growth and development of The Bahamas. Joint ventures between
international investors and Bahamians are eligible to access funding
from BDB or from the domestic capital market. Bahamians may, however,
borrow a percentage of their contributions from BDB or the domestic
capital market. An established joint-venture is not debarred from
accessing BDB funds.

Recently, there has been talk in the financial sector about
eliminating exchange controls. The government has already allowed
commercial banks limited exchange control powers. Local financiers
believe that eliminating exchange controls will increase investor
confidence, facilitate the free flow of currency in and out of the
economy, and enable the government to measure the performance of the
economy accurately.

The Bahamas is a beneficiary of the Caribbean Basin Initiative
(CBI) and the Overseas Private Investment Corporation (OPIC), and
EXIMBANK financing is available.

U.S. commercial banks operating in The Bahamas include:

BRITISH-AMERICAN BANK P. O. Box N-7502 Nassau, Bahamas Tel: (242) 327-5170 Fax: (242) 327-5166

CITIBANK BAHAMAS P. O. Box N-8158 Nassau, Bahamas Tel: (242) 322-4240 Fax: (242) 323-3088