NASSAU, BAHAMAS — Bahamian firms have cited access to finance as a major or severe obstacle to conducting business, with only a small percentage reporting having a line of credit to access short-term funding. 

The Inter-American Development Bank's (IDB) recently released 2024-2028 country strategy for The Bahamas pointed to the Innovation, Firm Performance, and Gender (IFPG) survey, which noted that more than half of the companies interviewed in The Bahamas characterized access to finance as a major or very severe obstacle to conducting business. 

The report noted, "Only 13 percent of firms reported having a line of credit to access short-term funding, compared to 22 percent in Belize and 16 percent in Antigua and Barbuda. Access to medium- and long-term loans is also limited, with 18 percent of companies answering that they have such a loan. In Belize, this figure was 24 percent, and in St. Vincent and the Grenadines, 23 percent. None of the surveyed firms in The Bahamas reported having equity financing, in line with trends in the rest of the Caribbean countries."

The report also noted that in 2020, domestic credit to the private sector by banks in The Bahamas stood at 61 percent of GDP, and although this was above the Latin American and Caribbean averages (55 percent and 50 percent, respectively), it was below the average in high-income countries (88 percent).

"Financial inclusion obstacles are in part explained by a slim system of credit unions, with only 10 entities, compared to 32 in Barbados. Credit unions are highly exposed to the tourism sector and represent about three percent of total banking assets. Their penetration in terms of the economically active population stands at 16 percent, lower than the Caribbean average of 66 percent," the IDB noted.

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