Bringing that resolution to the House of Assembly was Parliamentary Secretary in the Ministry of Finance Michael Halkitis, who also has responsibility for both the Bahamas Agricultural & Industrial Corporation (BAIC), and the BDB.
According to Mr. Halkitis, the $25 million bond issue would also assist in replenishing the Bank’s resources, which are nearly depleted.
He pointed out that the BDB presently has $52 million outstanding in loans.
According to Mr. Halkitis, one of the major problems that has plagued the Bank for a number of years is the fact that of its $52 million portfolio, only an estimated 53 percent is being paid back, with the remaining 47 percent falling into the category of not performing, in which case, payments are 90 days past due.
“Forty-five percent of the portfolio is current; eight percent has payments past due 31 to 90 days; 14 percent has payments past due 90 to 360 days; and 33 percent has payments past due by one year,” he disclosed.
The $25 million is not the Bank’s only source of additional funding. It is also able to secure financing from the Caribbean Development Bank (CDB). Its previous bond issue was taken up by the National Insurance Board (NIB.)
Mr. Halkitis has pointed out that the BDB has also taken advantage of a loan from the Central Bank and there is also an outstanding loan from the Inter-American Development Bank (IDB) as well as the European Economic Community.
The BDB was established more than 30 years ago to create employment by sponsoring projects utilizing Bahamian material and resources thereby reducing imports; promote the introduction of new technology and skills; and to promote prosperity for all Bahamians.
The Bank’s fundamental purpose then is to assist in industrial growth by providing financial assistance in areas like agriculture and fisheries, tourism, manufacturing, services and transportation, Mr. Halkitis noted.
In fact, according to Mr. Halkitis, over the years, loans from the Bank for both small and medium enterprises have accounted for an average of 375 jobs per year and the establishment of approximately 200 small and medium businesses annually.
“Over the past five years, it is estimated that jobs created through the functions of the Bank by advancing loans have totaled 4,520, an average of 300-plus per year,” he said.
The Bank has faced mounting criticisms for not doing “all it can” to facilitate local small and medium sized businesses, something authorities are hoping to turn around. But according to Mr. Halkitis, BDB executives often argue that the number one reason for rejection is that some projects do not fall within the purview of the Bank.
“The Bank would get many applications for retail operations, where someone wants to open a convenience store or some sort of sales operation where they would purchase goods and resell them to the public,” he explained.
“But the Bank is specifically constrained from financing that sort of operation. The same applies for constructing a building solely for rental. Another reason for rejection is the fact that the project may simply not be viable-.But I encourage persons that if you go to the Bank and they ask for certain documentation, they are not trying to turn you around but help you as much as they possibly can.”
Seconding the resolution, Labour and Immigration Minister Vincent Peet noted that while the Bank is now on the right track, more can be done to assist the institution.
“It is a small sum but it makes a difference to those who need assistance,” he said. “And as the Bank moves forward, I would want to see more assistance for farmers and fishermen.”
While also lending his support to the resolution, Montagu MP Brent Symonette noted that the government should not lose sight of the fact that the bond issue is becoming an indirect debt (on the government).
He however suggested the government should have possibly sought to raise more money, perhaps to the tune of $50 million.
“On estimates, it seems that the Bank is only able to approve and issue $8 1/2 to $9 million a year even with whatever money we give them, so this money only lasts two years,” he said
“Maybe we should have gone for $50 million and taken a five-year-plan and then issue them in various tranches and not come back to the house because if we are really going to be progressive and forward-thinking, this figure should have been higher because if there is any time if is always now to encourage Bahamians to go into business for themselves.”
Before breaking for their traditional summer recess, House Members also passed several pieces of legislation, including the Insurance Bill ,the Marine Mammal Protection Bill, the Foundations Amendment Bill and the Purpose Trust Amendment Bill.
Upon their return to Parliament in September, legislators are expected to debate several other bills, including the Montreal Protocol, the Judicial Proceedings Bill and the Rent Control Bill.
By: Macushla N. Pinder, The Bahama Journal
