The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas is “20 years behind the eight-ball” when it comes to microfinance, a budding lender in the sector yesterday telling Tribune Business he had set the “aggressive” target of generating 1,000 such loan accounts within 21 months.

Speaking with this newspaper as the Inter-American Development Bank (IDB) unveiled the second round of its Microfinance Capacity Building Project for the Caribbean, which will aid his business, Ethan Quant, president and chief executive of Progressive Consumer Services, said he was confident the firm - and the Bahamas - would “show up and takeover” in the field.

Pointing out that Progressive was the only Bahamian member of the Caribbean Microfinance Alliance, Mr Quant said the Project - together with the 1,000 account target - would see his business double its total staff to eight within two years.

Explaining that the Bahamian market for microfinance lending, involving sums typically ranging from $500 to $5,000 was 
“huge”, given that 72 per cent of companies employed between just one-four persons, Mr Quant said Progressive planned to ‘graduate’ entrepreneurs to ‘small business’ status before then ‘handing them on’ to commercial banks.

The Project’s second round will see its Canadian consultants, specialists in the sector, return to Progressive in October to assess the Bahamian microfinance market and “pretty much design a suite of products and services” aimed at the sector that the company will roll-out.

“The microfinance industry is green land, pretty much virgin territory,” Mr Quant told Tribune Business. “We’re really looking at Progressive to lead the way forward.”

He said that currently, no Bahamas-based lender, especially the commercial banks, was willing to provide entrepreneurs and micro businesses with 60-90 day, small loans of several hundred to a thousand dollars to assist with issues such as cash flow.

Noting that Progressive aimed to “fill that gap”, Mr Quant said the Project’s consultants would get the firm “primed and ready to go” by creating the foundation via products and staff training.

“We’ve identified certain target areas they [the consultants and IDB] want us to achieve,” Mr Quant told Tribune Business. “We have our targets as to what we want to achieve for the next 21 months for Progressive and the industry.

“We’re looking at something pretty aggressive. We’re trying to have at least 1,000 micro accounts on the books within the first 21 months.

“That’s my target. We have to identify 1,000 micro account holders or entrepreneurs that come through the system.

“It’s only going to take a push. This is a new product, new industry and we’re going to be working out the kinks as we’re going along. By June 2014, we want to have a line-up of 1,000 accounts.”

Mr Quant told Tribune Business that once the IDB consultants had completed their work, Progressive would seen financing to capitalise its loan fund.

“What we’re budgeting is $500,000 for the loan fund,”he said. “What we’ll be doing is looking to arrange a source for that funding once we’ve set up the platform.”

Noting that phone card sellers, roadside fruit and vegetable sellers and even straw vendors all counted as micro businesses or entrepreneurs, the Progressive chief described the market’s size as “huge”.

With 96 per cent of Bahamian businesses having between one to 50 employees, Mr Quant said 72 per cent of those had just between one to four staff, placing them squarely in his market.

“We are a nation of micro, small and medium entrepreneurs. As far as the potential for the market, it is there,” he added.

“The Bahamas is really 20 years behind the eight ball - behind the rest of the world and the region - in terms of providing financing and micro-lending.

“Progressive hopes to put us back on the ball, and hopes by its initiative to encourage others to fall into line and provide micro financing, creating an environment where small and medium and micro entrepreneurs grow and thrive, and help the creation of a diverse economy.”

Acknowledging the challenge posed by the 1,000 account target, Mr Quant said Access Financial Services, Jamaica’s biggest player in the field, had 3,000 microfinance accounts in a country with a three million-strong population.

While the Bahamas had just 350,000 by comparison, he added that companies in similar small island nations had been able to develop “four figure loan portfolios”.

“In true Bahamian style, we have set a very aggressive target,” Mr Quant told Tribune Business. “Along with the consultants, we feel that with the proper structure in place, we’ll be able to reach that and exceed their expectations and those of the IDB.

“All eyes are on the Bahamas. We are the smallest, youngest firm in the Alliance, and many people feel the Bahamas is a rich country. Many of my regional colleagues are looking to see what the Bahamas does...

“I’m not afraid. I welcome the challenge, because I feel in true Bahamian style we’ll show up and take over.”

Founded in 2007 as a mortgage broker, Progressive currently has a four-strong staff complement. But, with the Project and the account targets, Mr Quant said the company would have to hire two micro credit officers by November 2012.

“Each officer will have to handle between 250-300 accounts,” he told Tribune Business. “To get that 1,000, we’ll have to have three-four officers. That’s going to double my staff in 24 months.”