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OPINION: Current marketplace is "stifling economic growth" in Guernsey

OPINION: Current marketplace is

Tuesday 25 July 2023

OPINION: Current marketplace is "stifling economic growth" in Guernsey

Tuesday 25 July 2023


It is time for the States of Guernsey to intervene in a developing situation where businesses are finding it difficult to open bank accounts, according to the Director of The Guernsey Chamber of Commerce - in response Tim Chilestone (pictured) has warned a crisis is forming.

"Banking for businesses in Guernsey is becoming a crisis.

"Many people concentrate on the fact the island doesn’t facilitate Stripe or GoCardless but those are secondary concerns for me. The main focus should be on basic business needs like opening a business bank account.

"For many entrepreneurs, SMEs or businesses looking to set up in Guernsey, it’s becoming near impossible. Business owners often find the need to have an existing relationship with banks, are required to wait 12 to 16 weeks (if every box is ticked correctly on the first go) and have the risk of out-of-the-blue account closure. Acting as bookkeepers for many of Guernsey’s existing hospitality or small businesses means we see a lot of reasons why they are denied."

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"We were aware of a mail order operation business that was planning to set up a business in Guernsey and recruit more than 20 employees. However, due to the difficulty in opening bank accounts (including one bank that opened the account and then closed it a week later), they decided to locate it in Spain instead meaning 20 lost jobs in Guernsey.

"The current marketplace is stifling economic growth in Guernsey. I’m concerned that if changes aren’t made, we will see more examples of businesses not choosing Guernsey for their operations.

"This state of play for new businesses also means many are using personal accounts to run their business, which isn’t sustainable and can result in personal account closure.

"I believe it is time for the States of Guernsey  to intervene. We must ensure small businesses can actually operate. It is time for the States of Guernsey to mandate the provision of a basic business account for any limited company or sole trader - providing the usual exclusions of course for historical issues with that individual.

"I would also like to understand if a solution can be found involving Guernsey Post. They already have substantial cash handling facilities; perhaps it is time to consider a Girobank-type solution within Guernsey Post or for them to partner with another retail bank to allow access within Guernsey.

"The current banking marketplace for new businesses is not sustainable. I truly worry about any new business. The island needs to be set up as an economic enabler for these new ventures, but the current state of business banking is more like an economic extinguisher."

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