On page 24 of the Government's 2019/2020 Budget there is a sentence or two of populist rhetoric that surprises me coming from the Deputy Prime Minister and Minister of Finance.

"To date, the Bahamas Development Bank, the Bahamas Entrepreneurial Venture Fund, and two commercial banks have joined in as funding partners in this initiative. While I am pleased about that, I expect to see all commercial banks committing to do much more to provide tangible support for microfinance and small businesses in The Bahamas – either through the government's loan guarantee initiative – or through their own programmes…" (Click on image to enlarge)

Comments like this surface from adherents of political parties from time to time and they serve to threaten banks using the bully pulpit in the hope that banks will loosen their credit policies to serve political ends.

In writing about The Canadian Solution to the financial crisis, Fareed Zakaria remarked:

"Canada has done more than survive this financial crisis. The country is positively thriving in it. Canadian banks are well capitalized and poised to take advantage of opportunities that American and European banks cannot seize. The Toronto Dominion Bank, for example, was the 15th-largest bank in North America one year ago. Now it is the fifth-largest. It hasn't grown in size; the others have all shrunk.

"So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1—compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada's more risk-averse business culture, but it is also a product of old-fashioned rules on banking…"

Here's the threat to force banks to comply or they'll be publicly embarrassed to join the desired parade:

"I put the banks on notice that I will be meeting with them collectively to discuss this issue and to consider the options for requiring them at minimum to publish and publicize their ongoing performance and portfolio makeup to microfinance in the country and loans and facilities extended to Bahamian small business."

As to a potential solution for young entrepreneurs looking for financing, I suggest that like minded millionaires, develop a private equity/entrepreneurial fund to help.

Government picking winners and losers with tax dollars or forcing banks to do the same with their depositors money is asking for trouble not unlike the mortgage crisis of 2008 so familiar to us all.