As Cuba’s march toward private sector reform continues, its new business environment is proving increasingly attracting to foreign investment.

According to reports coming out of Canada, the Bank of Nova Scotia has reportedly applied to Cuban authorities to set up a representative office in the capital while Royal Bank is also considering opening an office in Havana.

Both banks already have extensive operations across South America and the Caribbean.

While the Montreal-based National Bank of Canada has operated an office in Cuba for 16 years, this potential move by two of Canada’s largest banks could be seen as legitimising the Raul Castro-led economic reforms that have been taking place on the island.

Just this week the Cuban government announced that banks on the island can now offer loans to private entities and individuals in order to accelerate the burgeoning entrepreneurial class.

The state newspaper Granma said about 500 banks in Cuba will offer the loans, although it remains unclear what interest rates they will charge. Applicants will find out if their loans are approved within twenty days, the paper indicated.

Reportedly, self-employed Cubans will receive minimum loans of about US$125, while farmers will receive at least US$40.

In addition, Cubans will also be able to avail themselves of debit cards, checks, and bank transfers – that is, services common to citizens of capitalist nations.

This liberalisation in banking could signal to the two large Canadian banks that it might be worth re-entering the waters in the Spanish-speaking nation.

Scotiabank and RBC both had branches in the country before the 1959 Cuban Revolution ushered in Communism, and a subsequent U.S. embargo, which slowed foreign investment.

National, Canada’s sixth-largest bank, opened a representative office in Havana in 1995. The small operation is not a bank branch though, and mostly handles trade finance.

Banco Central de Cuba, the country’s central bank, lists National as having a relationship with the country that dates back more than 28 years, including financing export development, securities and insurance businesses there.

The Cuba Trade and Economic Council lists more than 80 companies in Canada with business ties to Cuba, including Bell Canada, Bombardier, and dozens of oil and gas companies.