Basseterre, St. Kitts, June 28, 2017 (SKNIS): At a sitting of the National Assembly held on Wednesday 28 June, 2017, Honourable Senator Wendy Phipps, Minister of State with responsibility for Community Development et al., gave unwavering support for the Eastern Caribbean Partial Credit Guarantee (Corporation) Agreement Bill 2017, which was passed.
“From my understanding as someone who has worked in the private sector and by my own research, the establishment of the partial credit guarantee scheme is nothing new,” stated Senator Phipps, while outlining agencies such as the World Bank, which has done research on the matter and has discovered that partial credit guarantee programmes have been around since the late 19th century and early 20th century.
She continued: “For us to now come to the point in the OECS sub-region to be part of that mix, it is a step I think in the right direction for us,” stated Senator Phipps, as she pointed out that data suggest that 75 percent of registered businesses in St. Kitts and Nevis are classified as small and medium size enterprises (SMEs). She also noted that these businesses have a difficult time accessing capital and doing so at a reasonable interest rate.
“One of the things that is clearly obvious in terms of our discussions and debate on this Bill is that the passage of it will ultimately create a buffer, in terms of the default risk that the regular traditional banks would be facing,” the minister of state said, while she detailed that this buffer should be a source of encouragement for lenders.
“Senator Phipps made mention of the 2015 World Bank study on SMEs, pointing out the importance of SMEs in future job creation. She also outlined from the study that 50 percent of SMEs lack the appropriate funding needed for sustainable growth, which is the reason why similar credit guarantee programmes are being instituted around the Caribbean.
“The case has been made strongly in my opinion for the development of partial credit guarantee programmes,” said Senator Phipps, as she stressed that this programme is imperative to the development of small and medium size enterprises.