By VERNON CLEMENT JONES, Guardian Business Editor, vernon@nasguard.com

The Bahamas Development Bank is moving to crackdown on a spike delinquent accounts — now, in fact, the majority of those on its books.

Guardian Business has learned that a whopping 60 percent of active loans at the government-backed lender are now past due. Unfortunately, that's not the worst of it: Some 54 percent of those accounts are actually non-performing, or at least 90 days in arrears.

The numbers represent a decline in performance from even 16 months ago. Then, 40 percent of loans making up the bank's $60m book — generally directed at small-scale Bahamian entrepreneurship — were at least three months overdue.

While the faltering economy has played a role in that deterioration, bank officials are convinced the growth in bad accounts is being driven by good-old-fashioned delinquency.

Today, they'll outline an extensive plan to invigorate collection efforts, by reacting sooner rather than later to loan payments that go missing in action.

The move is perhaps the stick the agency has been reluctant to use, having more often reached for a carrot instead.

The bank's decision last year to better help new businesses get the kind of professional advice they need is the most recent example of the latter.

"We used to just give them the money and leave them alone," Dale McHardy, director of the bank's new business advisory unit, told Guardian Business last July. "We don't do that anymore.

"If a borrower received a loan from us last week, we'll be in contact with them this week."

That increased stewardship was to have run the gamut of advice - from bookkeeping and accounting assistance to help on computer software purchasing and succession planning. McHardy will likely review just how successful, or not, the new initiative has been in improving the viability of her clients' businesses.

But according to the bank's managing director, in the past many borrowers — no matter how profitable their operations — have resisted paying off their debt with BDB.

"If you look around the world everyone (development bank) has the same problem — that is the problem of delinquency," Calvin Knowles told Guardian Business last summer, pointing to the under-financed nature of his clientele. "Most people acquiring a development bank loan, through a government agency, view it as a place where they can borrow money and don't have to pay it back.

"As far as many are concerned, Jesus paid it all."

The bank has, in fact, been plagued by a high level of past-dues since it began operations in 1978. It was formed through an act of Parliament four years earlier.

Except for brief periods, notably 1999, it has officially operated in the red.

The bank's past flexibility, or willingness to work with would-be clients, came as part of a government mandate. While commercial banks have only begun to make a show of bankrolling Bahamian small business, Knowles's institution was, in part, formed to fill the void they've historically been unwilling to fill.

Its proactive stance has led to hundreds of success stories for working class Bahamians, pointed out McHardy. Most of them have been similarly successful in paying back their benefactor.

Still, the problem of delinquency persists — something Knowles inherited when he took up his post last year.

"I am trying to reverse the trend," he said last July.

Part of that strategy has been to make it more difficult to get a loan through his institution in the first place.