By Fay Simmons

Tribune Business Reporter

jsimmons@tribunemedia.net

The Prime Minister yesterday said reforms to multiple existing laws, combined with new legislation also passed in Parliament yesterday, will boost the ability of Bahamian entrepreneurs to access credit.

Philip Davis KC, addressing the House of Assembly, said the Transactions in Movable Property Security Interest Bill will enable businesses to pledge assets such as accounts receivables and intellectual property as collateral for loans while lenders will have confidence that their interest is secured.

“With the many challenges faced by local businesses, this Bill represents meaningful progress towards greater ease of doing business and access to credit that will be a boost to our business community,” said Mr Davis.

“This is just another example of how we are fighting to change the status quo and build a better, more prosperous Bahamas for everyone. This Bill is part of our wider plan to empower local businesses by expanding access to financing.”

Chester Cooper, deputy prime minister and minister of tourism, investments and aviation, said the Transactions in Movable Property Security Interest Bill will “favourably move the needle” in the financing space by allowing entrepreneurs easier to access funding.

Equipment, inventory and receivables can be pledged as collateral for credit. He suggested that banks and other financial institutions only accepting property as collateral has hindered many Bahamian entrepreneurs from expanding their businesses.

“Today, we move another step closer to fulfilling our commitment to addressing systemic challenges in our financial business landscape. This Bill is a practical tool designed to empower. It introduces a robust framework for leveraging movable property, such as inventory, equipment, receivables as collateral,” said Mr Cooper.

“For far too long, traditional lending practices have overly relied on real estate as the primary means of securing loans. This, of course, has left many capable and industrious Bahamians without access to financial support they need to expand their business or to get into business in the first place.”

Mr Cooper said the multiple Bills passed in Parliament will allow start-ups all over The Bahamas to use their available assets to access financing and will benefit the Bahamian economy positively.

“Consider the entrepreneur running a start-up. They have an excellent idea, the skills to execute it, and even a budding customer base. But they go to the bank, they don’t have real estate or real collateral, as the banks would say, and therefore the door to their dreams is sometimes closed,” said Mr Cooper.

“This Bill reopens the doors by enabling lenders to accept moveable properties as collateral in a standardised and legally secure way. Whether it’s a fisherman leveraging his boat in Inagua, a contractor using tools in Andros or a small housekeeper in Little Exuma using her inventory or even accounts receipt, this legislation improves their chances to access the financing they need over time, and I fully expected this Bill will favourably move the needle in this space.”

Mr Cooper added that established businesses can also use their assets to expand operations and increase staff. “We’re not just focused on start-ups, though,” he added. “Established businesses with steady operations, but limited cash flows, also stand to benefit.

“They can leverage their tangible and intangible assets to access loans that will enable them to scale the operations, to grow their operations, to hire more workers and contribute to our national prosperity.”