Fri | Oct 15, 2021

No traction on financing MSMEs from idle bank funds

Published:Friday | March 5, 2021 | 12:09 AM
Audley Shaw
Audley Shaw

The age-old proposal of using unclaimed balances in financial institutions to fund micro, small and medium enterprises (MSMEs) has failed to gain policy support – at least, up until now.

The issue came up for discussion again on Thursday during a meeting of the Standing Finance Committee of Parliament.

Minister of Industry, Investment and Commerce Audley Shaw said that the proposal had been put to Finance and the Public Service Minister Dr Nigel Clarke for action.

“It is very likely that in short order, the Cabinet will have to make a final decision on it,” Shaw told his colleagues in Gordon House.

Shaw said that it was a good idea for these funds be used to help small businesses.

Opposition Spokesman on Industry Anthony Hylton said that he was in full sport of the move, noting that “if the traditional sources cannot address this knotty and thorny issue for all these years, we must look to what is a legitimate source of funding to address this fundamental problem”.

During the deliberations, Shaw told the committee that the Government had made the decision to transfer $600 million that was “lying dormant” at the Micro Investment Development Agency Limited to the Export Import Bank for assistance to MSMEs.

He also announced that $266 million under the Tourism Grant programme would be used to provide support to small hotels and shops in the hospitality industry.

On another matter, Shaw reported that since the promulgation of legislation to establish the Office of the Supervisor of Insolvency in 2015, more than 100 companies and individuals have been deemed bankrupt.

“So far, there have been 130 cases. Nine of them are in receivership, 23 proposals are there for reorganisation, but of that number six went to bankruptcy and the other 98 are in the bankruptcy category at this stage,” Shaw said.