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Monday, June 29, 2009

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Development Bank chair connects with critics By INDERIA SAUNDERS ~ Guardian Business Reporter ~ Inderia@nasguard.com: The Chairman of the Bahamas Development Bank is responding to suggestions the institution needs a board shakeup, calling such a move unnecessary, especially during the current challenging times. "All of the business that has to be transacted by the board is getting done," Darren Cash told Guardian Business at last week's Chamber of Commerce open forum with several Cabinet ministers. "Any organization will benefit from [having a] broader perspective, but I don't think there is any lack of that perspective on the bank's board at the moment." His statements follow assertions by the head of the Bahamas Business Association that changes in the BDB board are absolutely key to the success of the organization. It also bookends government suggestions that the massive default rate for loans at the institution mean its very future is now at stake. BBA's chairman, Marvin Smith, argues those board changes, specifically the inclusion of grass roots businessowners, would help the lender better realize its own mission through improved stewardship of its accounts. "The Development Bank has to be more responsive to the business community," he said earlier. "As I understand it, the board does not meet on regular basis, maybe once or twice a month, and that's an unnecessary delay in getting projects approved." Cash fired back last week, asserting the board has, in recent months, met as much as four times a week, including weekends. It's the kind of drive, he said, that has seen directors adequately manage the level of applications from young entrepreneurs on a regular basis. But in addition to the board, Cash said a number of committees have also met regularly to address issues. His responses also follow indications from State Minister for Finance Zhivargo Laing that a sea-change is in order for the BDB, currently saddled with a 40-percent default rate. While Smith conceded one of the BDB's greatest challenges was getting persons to pay back loans, he suggested it would be in the bank's favor to include more small to medium sized enterprise owners in its board. He argued then that a move like that will allow greater understanding the BDB's task at hand. It's also a statement Cash takes issue with. "I'm not sure why he thinks that's necessary [because] we have a fairly diverse board as it is," he said. "We have a business bank that is attuned to all our clients, including prospective clients and I think the idea that the bank in general suffers because it doesn't have enough perspective from small businesses is quite misguided." Cash maintains the bank will continue to a diverse board of directors, representing all walks of the business community from big and small businessowners, to the self-employed and regular employees. "In terms of fundamental needs," he said, "the Development Bank is focused on promoting and assisting with the development of small businesses." Still, it and other government-backed lenders continue to face criticism from Bahamian entrepreneurs worried their lending has fallen off in line with the commercial banks. They're also concerned that bridge financing opportunities have failed to materialize at a time when they need it most. Monday, June 29, 2009