Minister of Industry, Commerce, Agriculture and Fisheries, Hon. Audley Shaw, is appealing for microfinance institutions to lower interest rates on loans for small business owners.
“I encourage microlenders to ensure that your (loan) products are not exploitative with high interest rates that, instead of lifting our entrepreneurs, push them into a situation of unproductivity and perpetual borrowing,” he said.
The Minister, who was addressing the Caribbean MicroFinance Alliance Forum at the Hyatt Ziva in Montego Bay on Thursday (October 11), outlined that the end goal of microfinance should be to have its users outgrow small loans “graduate and become ready for better and cheaper avenues of financing”.
He noted that the Government is working on the Microcredit Bill, which will, among other things, regulate micro financiers and protect their customers.
“The Microcredit Bill is being promulgated and is undergoing the final stages of preparation by the Chief Parliamentary Counsel prior to submission to Parliament,” he informed.
He said that the new legislation is intended to make registration of businesses mandatory, establish qualifying criteria for registration; create a regulatory authority to govern business standards and practices; as well create new provisions to promote full disclosure of all rates, fees and charges on principal debt “recognising that transparency is the hallmark of all financial business activities”.
The Caribbean MicroFinance Alliance Forum, under the theme ‘Taking microfinance to the next level,’ provides opportunity for participants from across the region to explore compliance issues and the influence of technology within the sector, engage in interactive panel discussions and attend insightful sessions on key topics.
The forum, which opened on Wednesday (October 10) concludes on Saturday (October 13).