The Barbados Government wants commercial banks to plough some of their profits into venture capital to assist small businesses. Minister of State in the Prime Minister’s Office, Senator Darcy Boyce, said so in an address to the 100th Anniversary function of the RBC Royal Bank of Canada at the Hilton.
“I believe that the Income Tax Act as recently amended provides the opportunity for banks to do so with some measure of tax relief,” Senator Boyce said, “Our banks are generally sufficiently profitable to make a significant financial contribution in this way to the development of entrepreneurship in our society,” The Minister told an audience that included RBC officials and staff, as well as several businessmen and clients.
Senator Boyce said that most banks in the Caribbean tend to shy away from new businesses unless the owners are well capitalized and are able to provide collateral for new loans. He acknowledged that as more of our people move into business for themselves, the proportion of collateral to support loans will be lower.
To this end, the Minister reasoned, banks will have to assess project loans more on the basis of the quality of the project itself, and the supporting structure that the project proponents are able to put in place. “But beyond this, banks will also have to help some of these new business owners to access risk or equity capital to mix with regular loan capital from the bank in order to make projects succeed,” said the Minister.
He noted that many small businesses often benefit from mentorship from more established older business persons. Senator Boyce added that banks know as well as anyone else and better than most whom those successful business persons are, and probably are better able than most persons to give that support.
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