The programme launched in 2011 to make it easier for businesses to receive payment for goods and services provided to Government is to be restructured.
Minister of Industry Donville Inniss, who made the announcement, said the Trade Receivables Liquidity Facility, more commonly known as a factoring programme, was wrapped up in too much red tape.
“From what I’m told a lot of it relates to bureaucracy, the sheer amount of time it takes to get through the system, the amount of paperwork that has to be done, which really and truly to my mind goes against the grain and spirit of it in the first place,” he told BARBADOS BUSINESS AUTHORITY last Wednesday.
Inniss was speaking at the Savannah Beach Hotel following the opening of a training workshop for counsellors and directors of small business development centres.
During his address, he said the programme had to be restructured “to make it easier to implement and to engage other financial institutions such as the credit unions”.
When the programme was initially launched, then Minister of Industry Denis Kellman said it would allow businesses to receive timely payment at discounted rates.
It was anticipated that no more than seven working days would elapse between the time contracting ministries and departments certify that goods and services had been provided and the time of payment.
A revolving fund of up to $15 million was made available to the facility which is administered by the Central Bank of Barbados and facilitated by commercial banks.
Chief business development advisor in the Ministry of Industry, Francine Blackman, told BARBADOS BUSINESS AUTHORITY there was some interest in the programme but some business people were reluctant to be involved since they would not receive the full amount owed.
“If you have an invoice with Government that is, say $10 000, at this point you are given a discount at five per cent so you would get $10 000 less five per cent,” she explained.
Recently, chief executive officer of the Barbados Small Business Association, Lynette Holder, contended that the administration of the programme was not enabling small enterprises to benefit.
She said the 2013 Budget was an opportunity to consider policies to improve access to the factoring programme. (NB)
