By BETTY VEDRINE, Guardian Senior Reporter

The College of The Bahamas (COB) signed a Memorandum of Understanding (MOU) with the Inter-American Investment Corporation (IIC) yesterday.

The MOU outlined the cooperation between both institutions to implement the FINPYME program in The Bahamas.

FINPYME is the Spanish acronym for Innovative Financing for Small and Medium-size Enterprises (SME).

COB president Janyne Hodder said yesterday's signing was an important step as entrepreneurship and that small to medium-sized businesses were key to many economies, including The Bahamas.

"We are pleased to be laying the ground work for this memorandum," said Hodder. "It marks not only another tangible link in our transition towards university status but it also gives us another tool by which we can inform national opinion and help to build the nation through education, research and innovation.

Hodder added that it was also another milestone for the college.

"It is also appropriate that our School of Business, the first to introduce a bachelor's program, is at the forefront for what is a very exciting and novel collaboration."

Signing the agreement were President Hodder; Rhonda Chipman-Johnson, Senior Vice-president COB; Michael Apel, Senior Trust Fund and Technical Assistant Officer; and Jorge Roldan, Division Chief, Finance and Risk Management (IIC).

"We're so happy that The Bahamas along with the other Caribbean countries, have been included in this project," said Chipman-Johnson.

The objective of FINPYME is to introduce a mechanism for evaluating SMEs that will assist them in their approaching banks for financing.

The program will also provide SMEs with the tools used by large corporations to collect and analyze data, detect problems and define plans of action.

Additionally, the program will provide training to College of The Bahamas professors so that they will become familiar with the program methodology in order to carry out diagnostic reviews of at least 20 companies in the country.

"As we look around in Nassau, we see that Bahamians are busy running their own businesses and contributing to the national economy," said Hodder. "It is exciting to consider that with this program in place, those same entrepreneurs can expect to receive innovative management tools that will enable their companies to overcome weaknesses and formulate strategies that will enable them to access financing and develop their businesses," she continued.

The IIC is the only regional multilateral institution that provides funding to private businesses in Latin America and the Caribbean with special emphasis on small to medium-size enterprises.

Established in 1989, the IIC has granted over $2.6 billion in loans to private companies in the region. Focussing mainly on key sectors such as agriculture, education, healthcare and fisheries, financing from the IIC has gone directly to approximately 500 companies and indirectly, to over 800,000 SMEs and has resulted in the creation of thousands of jobs.

A similar program was established in Chile and Bolivia in 2000 and other programs are being planned for Trinidad, Belize and Barbados.

The eligibility criteria for companies that wish to participate in FINPYME include those companies which have been in operation for at least three years with annual sales of at least $150,000 (depending on the country). The company must be an exporter or have the potential to export, operate in IIC-eligible sectors, have expansion projects planned for the future and must operate in compliance with local environmental and occupational safety laws and regulations.

IIC member countries include the Caribbean, including Latin America, Austria, Belgium, France, Finland, Israel, Italy, Japan, Netherlands, Norway, Portugal, Republic of Korea, Portugal, Spain, Sweden, Switzerland and The United States.

Public launching of FINPYME will take place later this year and interested companies will be invited to attend in order to learn more about the program.

FINPYME is financed primarily with resources from the Korea-IIC SME Development Trust Fund, established after the Republic of Korea joined the corporation as a donor member country. Additional funds were also contributed by the Austrian Trust Fund at the IIC.