Eliz­a­beth Gon­za­les

To­ba­go Cor­re­spon­dent

The To­ba­go House of As­sem­bly (THA) has of­fi­cial­ly launched its first-ever loan guar­an­tee pro­gramme to help lo­cal busi­ness­es ac­cess much-need­ed cap­i­tal.

Speak­ing at the launch on Tues­day, Sec­re­tary of Fi­nance and the Econ­o­my Petal-Ann Roberts said the ini­tia­tive is a di­rect re­sponse to the fi­nan­cial strug­gles many To­ba­go busi­ness­es have faced since the COVID-19 pan­dem­ic.

“The eco­nom­ic un­cer­tain­ty caused by the pan­dem­ic has made com­mer­cial banks very hes­i­tant to lend to the pri­vate sec­tor in To­ba­go,” Roberts said.

“The per­ceived risk as­so­ci­at­ed with lend­ing to busi­ness­es with weak­ened fi­nan­cial po­si­tions has led to a tight­en­ing of cred­it con­di­tions.”

She ex­plained that the pro­gramme is not a di­rect loan from the THA, but a guar­an­tee that will cov­er 80 per cent of a loan grant­ed by ap­proved com­mer­cial banks, in­clud­ing Re­pub­lic Bank, First Cit­i­zens and Sco­tia­bank.

“This is re­al­ly a guar­an­tee,” she said.

“It is not what we are lend­ing to you. It is what we want to stand as col­lat­er­al for you.”

Busi­ness­es can ac­cess be­tween $750,000 and $3 mil­lion, with a max­i­mum re­pay­ment pe­ri­od of sev­en years. The funds can be used for any com­mer­cial pur­pose ex­cept buy­ing prop­er­ty, re­pay­ing old loans, or fi­nan­cial in­vest­ments.

Roberts al­so had a strong mes­sage for busi­ness own­ers and the banks.

She stressed the pro­gramme fa­cil­i­tates a loan by a bank where the THA will on­ly stand se­cu­ri­ty but is not in­volved in grant­i­ng the loans.

“I was on the tele­vi­sion (morn­ing show), and I think peo­ple have a sense of en­ti­tle­ment,” she said.

“They hear loan, but they didn’t hear guar­an­tee… be­cause the gov­ern­ment is in­volved and this is tax­pay­ers’ mon­ey, so I should get ac­cess.”

To the banks, she added: “I want you to keep up your strin­gent pro­ce­dures and process­es in lend­ing to busi­ness­es.”

She said the pro­gramme is not a short-term fix, but a long-term in­vest­ment in To­ba­go’s fu­ture.

“As busi­ness­es suc­cess­ful­ly re­pay their loans, the pro­gramme will tran­si­tion in­to a re­volv­ing fi­nan­cial in­stru­ment,” Roberts said.

“This self-sus­tain­ing cy­cle en­sures that fu­ture gen­er­a­tions of en­tre­pre­neurs have on­go­ing ac­cess to crit­i­cal fi­nanc­ing.”

She as­sured that the THA will make an­nu­al bud­get al­lo­ca­tions to keep the pro­gramme run­ning.

“We are cre­at­ing an ecosys­tem here where en­tre­pre­neur­ship is en­cour­aged, where lo­cal busi­ness­es are sup­port­ed, and fi­nan­cial in­sti­tu­tions can in­vest con­fi­dent­ly in the peo­ple of To­ba­go,” Roberts said.