As a part of the Bahamas Development Bank’s (BDB) and the Ministry of Finance’s on going efforts to assess the best options and models to effectively finance, promote, and sustain the development of small and medium sized businesses (SMEs) in the country, the BDB recently hosted a one-day Leadership Forum on small business development at the British Colonial Hilton on February 3, 2011. A broad-range of business stakeholders including small business owners, development and commercial bankers, venture capital fund executives and small business development consultants were given an opportunity to discuss their positions on issues surrounding funding and support to existing, new and aspiring entrepreneurs. Some of the views expressed by the participants will be used by the Government in the creation of a new legislative regime.

Mr. Darron B. Cash, Chairman of The Bahamas Development Bank chaired the Leadership Forum. Featured speakers on funding and support models were Dr. Basil Springer, a former Consultant to the Caribbean Development Bank and a Change Engine Consultant with the Caribbean Business Enterprise Trust Inc. (CBET) in Barbados, and Mr. Sandro Murtas, Director of the International Trade Center of the Puerto Rico Small Business Development Center.

Other featured presenters included former Minister of Trade and Industry, Mr. Leslie Miller, Owner of Mario’s Bowling & Family Entertainment Palace; Mr. Dionisio D’Aguilar, President of Super Wash, Chairman of Abaco Markets and former President of the Bahamas Chamber of Commerce; Mr. Jerry C. Butler, Executive Director and C.E.O. of Global Equity Consultants Ltd., former Chairman of the Audit Committee and the Ethics Committee of the Board of Executive Directors of the Inter-American Development Bank, and former Financial Controller of BDB and Mr. Hubert Edwards, Senior Manager of Business and Strategic Planning at The Bank of The Bahamas; Mr. Paul D. Major, Business Consultant and former General Manager of the Bahamas Agricultural and Industrial Corporation (BAIC) and former Managing Director of BDB; Mr. Basil Smith, Chief Communications Officer in The Ministry of Tourism; Mr. Mario Cartwright, Owner and Managing Director of Flying Fish Marina & Yuma Oil and Gas in Clarence Town, Long Island; and Mr. Philip Simon, Executive Director of We The People and former Executive Director of The Bahamas Chamber of Commerce.

Alternatives to the current model of the BDB, BAIC, VCF

Dr. Springer and Mr. Murtas individually outlined two specific options that would serve as alternatives to the existing model of The Bahamas Development Bank (BDB), Bahamas Agricultural and Industrial Corporation (BAIC) and the Venture Capital Fund VCF).

Dr. Basil Springer informed that the CBET Shepherding Model in Barbados is a partnership between CBET Inc., the Barbados Government, the Barbados Private Sector and Foreign Direct Investment, in which the CBET provides ‘Shepherding’ or effective management, mentoring and counseling to small businesspersons throughout the life of their businesses to ensure their success. The Government in turn invests monies through Seed Venture Capital Funds and Venture Capital Funds. Additionally, the private sector, mainly “commercial banks, insurance companies, big firms” are also invited to invest with an opportunity to receive a return on their investments.

Dr. Springer explained that with the CBET Shepherding Model entrepreneurs are awarded grants for businesses which can grow outside of the country in the global market. He disclosed that in Barbados the companies which they have invested in are “projected conservatively to generate an average of $1million per year, per business over the first five years after the start up year.”

Dr. Springer strongly urged The Bahamas to adopt the CBET Shepherding Model. He noted that to function effectively, the model has to be void of any political interference. As such, he suggested that should it be introduced in The Bahamas, it should not fall under the responsibility of the BDB, BAIC, or the VCF but rather under the establishment of The Bahamas Business Enterprises Corporation, which he advised should be declared a non-profit organization, by the Government. “Let the role of the Government be to provide regulatory and service functions, not own and control something that should be done by the private sector…” Dr. Springer stated.

Mr. Murtas, Director of the International Trade Center of the Puerto Rico Small Business and Technology Development Center informed the group that in Puerto Rico, a US territory, there are about 3.8 million people and as a result some 10 Small Business Development Centers (SBDCs) along with special programs have been established across the country to help develop small businesses. The Federally funded SBDCs offer SME’s counseling, training, help with the development of business and marketing plans, and with the locating of financing.

According to Mr. Murtas priority is placed on businesses that have a high potential for import and export, as well as an ability to participate in international trade. The SBDCs also provide loan guarantees and functions as a co-signer to assist small businesses in Puerto Rico in accessing funding through the banks.

Mr. Murtas reported that the SBDCs are funded by three partners - the SBA (Small Business Administration) that provides small businesses with access to capital, an Inter-American university which provides training, and the Puerto Rico State Agency which attracts investment to the island and helps local companies promote the economy.

Mr. Murtas explained that it is mandatory that all entrepreneurs requesting assistance participate in three seminars that cost $150.00 in total. These fees are paid for by the entrepreneurs themselves. The seminars focus on how to run and develop a successful business. Once the business owners meet this requirement and demonstrate their seriousness, they can then receive free counseling and opportunities to assist them in gaining access to funding.

Mr. Murtas stated that during 1997 to 2010 the Puerto Rican SBDCs assisted around 30,000 clients which translated into an estimated 240,000 hours of assistance with 60 hours being the average amount of time invested in each client.

Debating the future of the BDB

Former Managing Director of the BDB and former General Manager of BAIC, Mr. Major said, “Today, there is as great a need for the existence of the Bahamas Development Bank as there ever has been.” He argued that BDB and BAIC should be amalgamated to capitalize on the synergies that exist. He insisted however, that if the BDB was removed from the banking landscape, the void would not be filled by the commercial banks.

Businessman and former Minister of Trade and Industry, Mr. Miller holds the view that the “single most challenging obstacle facing newly established or existing small and medium sized enterprises is access to funding.” His position was that while The Bahamas has relied on the original recipe of using taxpayers’ money to establish public sector institutions for the purpose of assisting in the development of SMEs by establishing BDB, BAIC, and the VCF, “the performance of those public sponsored development institutions has been less than stellar over the years.”

Mr. Miller strongly recommends that attention should be placed on providing financial assistance by some form of loan guarantee programs to qualified SMEs; hiring on a case by case basis skilled technical assistance from the private sector; in addition to the establishment of legislation focused on business-friendly laws to support small businesses.

Perspectives from Chamber of Commerce Leaders and Small Business Owners

Mr. Cartwright, President of the Long Island Chamber of Commerce, Owner and Managing Director of Flying Fish Marina & Yuma Oil and Gas in Clarence Town, Long Island commended The Bahamas Development Bank for granting him a significant loan to establish his project, one which he admits he would not have been able to receive from a regular commercial bank. He did however express concern over the length of time of the loan approval process. Nevertheless he commented, “Flying Fish Marina exists today and it is growing, thanks to the large part of The Bahamas Development Bank.” He added, “Unfortunately, the Development Bank cannot help everyone.” Mr. Cartwright called for more money to be made available for the BDB.

Mr. Cartwright believes that the amalgamation of BAIC, BDB, and the VCF may be a good idea to assist in accelerating the process for persons requiring funding. Mr. Cartwright called for a more efficient and quicker mode of transportation and accessibility to the Family Islands, improved infrastructure, adequate advertising and promotion to boost traffic to the island, and the implementation of incentives to qualified Bahamian investors such as Crown Land grants, duty concessions and access to capital.

Former President of the Bahamas Chamber of Commerce, and President of Super Wash and Chairman of Abaco Markets, Mr. D’Aguilar expressed mixed views on BAIC and BDB. He noted that he has always felt that there was no need for public institutions like BAIC and BDB. He admitted however following the discussions at the BDB Leadership Forum he had somewhat changed his mind. Mr. D’Aguilar said his view was based on what he pointed to as “results that have not been terribly successful.” He admitted though that ‘there are some success stories.” Mr. D’Aguilar concluded by saying, “I think some kind of loan guarantee scheme, some sort of incubation program is very, very necessary.”

Mr. Simon, Executive Director of We The People, former Executive Director of The Bahamas Chamber of Commerce suggested the privatization of the Venture Capital Fund; and called for the creation of a small business administration or National Development Agency and resource center that would be governed by a fully independent board with no political representation. Mr. Simon pointed out that while Bahamians are very entrepreneurial as a people, the question is how do we expand that spirit into businesses that can sustain themselves for generations. “We have to move beyond that mom and pop level,” Mr. Simon commented. He also called for greater emphasis to be placed on Cultural Heritage Tourism, and that the country’s tax structure be revisited.



Mr. Butler, Executive Director and C.E.O. of Global Equity Consultants Ltd., former Chairman of the Audit Committee and the Ethics Committee of the Board of Executive Directors of the Inter-American Development Bank, and former Financial Controller of BDB expressed the view that BDB and its clients must be balanced with a national plan with empowerment, and a plan for institutional development. “In other words, if BDB gets money to empower Bahamians, and lend it to them, there must be a plan to sustain BDB.” He continued, “Which means the loans have to be paid back, or there must be a plan to get additional funding, and to do off balance sheet transactions for people who could pay…”

Mr. Hubert Edwards, Senior Manager of Business and Strategic Planning at The Bank of The Bahamas expressed a grave concern over the failure of various Government operated institutions which are designed to assist in funding and supporting small and medium sized businesses in the country. “We have some excellent case studies on failure. After the failure of these programs, we need to dissect them and say what is it that we can learn from these various programs and change the total.” Mr. Edwards argued that the Bahamas Development Bank has “a great opportunity to re-invent itself.” He strongly advised that more flexibility be placed into such programs so that they can become self sustaining, and also that such programs be done within a national environment, one that incorporates all of the islands of The Bahamas.

Describing The Bahamas as a regional leader in tourism compared to other countries, Chief Communications Officer in The Ministry of Tourism, Mr. Smith said, "To put it plainly, we are regional leaders having not even scratched the surface of our potential…” Mr. Smith informed the group that the Ministry of Tourism is actively engaged in an exercise that will shape and promote unique and distinctive brand profiles for 16 islands and island groups within The Bahamas including Andros, the Abacos, The Exumas, Eleuthera and Harbour Island, Ragged Island, Mayaguana, Long Island, the Berry Islands, Nassau, Paradise Island, Grand Bahama, Inagua, Rum Cay, San Salvador, Acklins, Crooked Island and Bimini. Mr. Smith revealed that in the mid and longer term, the bed of opportunity for small and medium sized businesses is to be found in these 16 islands, servicing the development of the tourism sector and the needs of the local population who emigrate to these islands.

Also in attendance at the Leadership Forum were senior executives of The Bahamas Development Bank including the Acting Managing Director, Mr. Anthony Woodside along with other BDB officials; Mr. Christiaan Sawyer, President of Sunryse Shredding; Businesswoman, Mrs. Claire Sands; Mr. Ron Dames, Program Manager for Junior Achievement (Grand Bahama) and Mr. Delano Munroe, Program Manager for Junior Achievement (New Providence).