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Independent research is being undertaken to identify whether a lack of access to finance is adversely impacting Guernsey people and businesses.
Finance for Guernsey has been established to qualify what the needs are in terms of transactional banking and the availability of credit. Founder and director Geoff Miller believes funding issues are restricting islanders from getting onto, and progressing up the property ladder, preventing entrepreneurs and SMEs to establish and grow business ventures and causing issues for local corporates and businesses in the finance sector when setting up and maintaining banking relationships. He has now commissioned independent research to identify the gaps.
‘There has been considerable talk about islanders being unable to get mortgages, which it is claimed is stagnating the housing market, and local businesses being restricted from either launching or growing due to a lack of investment. We’re also aware of the problems that fiduciary businesses are facing,’ said Mr Miller.
‘Finance for Guernsey has been established to investigate these issues further and identify possible solutions. It is backed by leading, locally-based businessmen, who are committed to the island and its continued success, and all believe that improvements can be made. Once we have fully understood the situation, we will use the findings to propose a solution which will enhance the future prosperity of Guernsey.’
Mr Miller has spent six months talking to the finance community to gain a better understanding of the current situation.
‘From the discussions I have had over the last six months, there is clearly a need and what we need to do now is identify where the gaps are. This is particularly important in the wake of Brexit as the island negotiates with both the UK and the EU for a position which benefits the island, its people and its economic prosperity,’ he said.
Mr Miller said he believed there are four possible conclusions.
‘The first would simply be to do nothing if the research shows that all needs are being met. The second is a locally managed fund financed by Guernsey investors to either help people or businesses and the third would be a broker who would to facilitate lending between a third party financier (either individual or institutional) and islanders,’ he said.
‘The fourth is the most interesting and that would be the establishment of a bank which would be locally owned and universally accessible to anyone resident in, or any organisation operating within, the Bailiwick, whether they are looking for an account, needing a mortgage or wanting capital investment to establish or grow a business.’
Mr Miller, who has worked in the finance industry for more than 30 years, said that there was no preferred option.
‘It’s critical that we don’t prejudge anything and go into this process with preconceived ideas. We want the whole island to be engaged with this research so that it delivers useful data on what the fundamental problems are and how they can be solved.’
Finance for Guernsey had already established relationships with a number of individuals who could provide expertise depending on the outcome of the research. The investors who had initially funded would be given first refusal for the formal fundraise required as part of any formal application for a banking licence.
‘The fund and the broker are relatively easy business ventures to establish. The bank would be far more complex and it will be critical for us to bring in an executive team who had expertise in retail banking,’ said Mr Miller.
He added that while the States of Guernsey had mooted the possibility of a Bank of Guernsey last year, they currently had no involvement.
‘This is a private enterprise with the future success of the public at its heart. Guernsey has always been very entrepreneurial and has constantly evolved itself to remain competitive and differentiate itself and we want to ensure that that can continue,’ he said.
‘We have obviously had discussions with senior politicians to make them aware of the plans and will continue to liaise with them to ensure we deliver a solution that the whole island needs.’
