The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Final recommendations on the proposed small business legislation will be presented to the Government by mid-May, a key adviser yesterday saying the initiative could be “transformational” with buy-in from commercial lenders.

Merrit Storr, attorney and partner at the Chancellors Chambers law firm, which drafted the initial Small and Medium-Sized Business Development Bill, told Tribune Business the legislation would “be of tremendous assistance” in helping Bahamian-owned companies to grow the economy out of its current malaise.

Extensive private sector consultation on the Bill had “generated the kind of feedback we wanted”, Mr Storr said, adding that most agreed the effort should be “as free of political interference as possible”.

And the creation of the Small and Medium-Sized Business Development Agency (SMEDA) should provide Bahamian small businesses with all the resources they needed, and “not just enough so that they fail”.

Mr Storr, who has led the consultation effort, said meetings had been held with the Bahamas Chamber of Commerce and Employers Confederation (BCCEC), plus its sister Chambers on Grand Bahama, Abaco and Exuma.

The Bahamas Hotel and Tourism Association (BHTA), especially its small hotels department; the Bahamas Co-Operative Credit Union League; the Bahamas Development Bank’s (BDB) Board; and Bahamas Agricultural and Industrial Corporation (BAIC) representatives have also participated in the consultations.

Disclosing that he had a meeting scheduled with the Clearing Banks Association (CBA) for this month, Mr Storr told Tribune Business: “I’m going to start preparing my final recommendations based on those consultations within the next week.”

Many of the organisations involved in the consultations have submitted their own written suggestions, after being invited to do so, and Mr Storr said these would be presented to the Government along with his own findings.

“I will be submitting my final recommendations, and their feedback, to the Ministry of Finance by mid-May,” Mr Storr said.

“The feedback has been very positive and supportive. The Government would like to move ahead with this as quickly as possible, so in the next few weeks I will have the final recommendations in.

“The consultation thus far has generated the kind of feedback we wanted, and we have a lot of information that will allow us to move to the next stage, which we want to reach as quickly as possible.”

Once his recommendations and private sector feedback are received, Mr Storr said the Government would have to decide whether to accept all or some of these, and then make the necessary changes to the draft Bill.

After that, the legislation would have to be presented to, and approved, by both Cabinet and Parliament.

“The goal is to have it ready for Parliament before the summer recess, [if] that’s possible,” Mr Storr said.

Describing the consultation effort as “pretty comprehensive”, he added that the organisations met with represented the widest cross-section of the Bahamian business community. While conceding that there were other groups they could have met with, Mr Storr said the process had to move forward.

Explaining that major changes to the draft Bill were unlikely, he said feedback received to-date was particularly enthusiastic on SMEDA being a private sector-led organisation.

“I wouldn’t say there will be a lot of changes,” he told Tribune Business. “The feedback we’ve gotten is there are certain things people would like to see tweaked.

“For example, they like the fact SMEDA is private sector driven, and that the majority of Board members come from the private sector, not the Government.

“The feedback we’ve gotten is that the private sector, rather than the Government, drives the organisation, and that it should be as free of political interference as possible.

“They want to se that reflected in the Board of Directors, and who gets appointed to the Board.”

Asked about the likely impact from these reforms, Mr Storr told this newspaper it was critical that banks and other commercial lenders stepped up their willingness to finance Bahamian small businesses and entrepreneurs.

With the Government seeking to exit direct small business lending by itself, SMEDA will instead be charged with preparing business plans and providing guarantees to underwrite such loans.

“The hope is that it will be of tremendous assistance if we can get commercial banks, credit unions and lenders to buy into the concept,” Mr Storr told Tribune Business.

“SMEDA doesn’t act as a lender; it offers guarantees to other lenders. What we need is for financial institutions to embrace the concept, and if they agree it’s something that can be transformational for our jurisdiction.”

SMEDA, which will have an initial $25 million capitalisation, is designed as the Government’s main small and medium-sized enterprises development vehicle.

Mr Storr said its business advisory services arm was “a big aspect” of the reforms, “ensuring people starting small businesses have what they need, not just enough so that they fail”.

“The potential is for it to make a big difference, and in the current environment, the small business sector needs to be encouraged, so it can grow and help us to grow out of the current environment we are in,” Mr Storr said.