NASSAU, BAHAMAS – Despite some initial pushback the government’s requirement for proper financial reporting has significantly strengthened Bahamian small and medium-sized enterprises (SMEs), placing the sector in a “far better position than it was four years ago,” according to Financial Secretary Simon Wilson.
Wilson while speaking on a panel at The Bahamas Business Outlook conference said these measures have fundamentally changed the SME sector, as the move toward audited and reviewed financial statements has improved record-keeping, increased transparency, and made it easier for SMEs to access credit and grow with confidence.
“The SME sectors in a much better position than four years ago due to government requirements for financial reporting, Wilson noted.
Wilson said: “When you talk about the small-medium business sector, it’s almost like reverse psychology. Bahamians are innovative. They start good businesses, have good products, do marketing, but the one thing is they have poor record keeping. If you look onto the top line, very successful, but you go deeper, it’s chaotic.”
He noted that early efforts to enforce better record-keeping faced resistance. “We did something years ago, got a lot of pushback, and a lot of angst when we said we need audited financial statements to help us monitor. The first year was complete hell.”
Despite initial challenges, Wilson said the results have been transformative. “What we realized is this is the year, and what I see now is that businesses that were borderline are now saying, ‘I know what I make and don’t make.’ In the past, they had to massage the numbers, but they now walk through the door with their audited financial statements. It makes it easier for them when they want to seek financing. While imposing regulation and enforcing compliance, we have helped the sector grow.”
Wilson added that not all businesses require the same level of oversight, but the sector still needs structured support. “The sector needs more concessional funding. It needs stronger grant funding and support. I would say the sector is in a much better position than it was four years ago because so many more businesses have proper financial statements and can go to a bank or other lender and say, ‘Here is my financial statement,’ and that’s a big, big gain. That happened because we said we need audited financial statements for tax purposes.”
Roger Archer, Managing Director of Scotia Bank Bahamas highlighted the importance of audited statements in lending. “Great, records are not strong, and it’s not exclusive to the management, but for us to be able to lend, we need to have confidence we can recover that. If financial statements are not available, it makes it difficult.”
All businesses with turnover of $250K+ are required to submit an independent accountant’s report. Businesses with turnover of $250K–$4.99M are required to submit a review report and business licence return reviewed by a BICA member. Businesses with turnover of $5M+ are required to submit financial statements and business licence return audited by a BICA member.”
