ST JOHN’S, Antigua – Only two financial institutions on the island have signalled their full support for government’s Credit Guarantee Scheme for small and micro enterprises (SMEs).
Close to $500,000 was allocated last March for the programme and Finance and Economy Minister Harold Lovell said a check with the Antigua & Barbuda Development Bank (ABDB) last week revealed that only two banks have come on board.
The Loan Guarantee Scheme was designed to allow business owners and entrepreneurs to access credit from a lending institution of choice that will be backed by the government through the ABDB.
Lovell said financial institutions took a while to give the programme a nod of approval but every effort is being made to address this.
“The banks took a very long time to give their approval before deciding to come fully onboard. I am told that the Antigua Commercial Bank is fully onboard now and so they will be moving ahead with the Antigua Commercial bank. I gather that at least one other commercial bank has indicated that they will also be coming on stream very shortly,” Lovell said during an interview at the launch of National Backyard Garden day on Wednesday.
The main objective of the scheme, the finance minister said, is to reduce the difficulties SMEs face in accessing finance whether due to perceived higher risk operations and or lack of adequate collateral.
The minister said it is his hope that all commercial entities in the country come on board.
The joint initiative guarantees 80 per cent of the approved loan to a maximum of $20,000. The guarantee period will cover the life of the loan from the first drawdown date.
Although the scheme is intended to support small businesses in general, the minister said some priority areas have been identified.
They are agro-processing and related services; health and wellness, including indigenous spas and alternative therapies; indigenous craft; art and cultural activities; tourism related services (tours and new attractions); software development, and manufacturing.
(More in today’s Daily OBSERVER)