Industry and Commerce Minister, Audley Shaw, is appealing for microfinance institutions to lower interest rates on loans for small business owners.
He’s encouraging micro-lenders to ensure their loan products are not exploitative with high-interest rates that, instead of lifting entrepreneurs, push them into a situation of unproductivity and perpetual borrowing.
The Minister was addressing the Caribbean MicroFinance Alliance Forum at the Hyatt Ziva in Montego Bay recently. He 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 microfinanciers and protect their customers.
Minister Shaw says 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 says 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.
It’s also intended to 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.