Commercial banks in the region are providing less than robust financial backing for private investment and, by extension, contributing to the overall underperformance of business in the region.
At this week’s Carib-bean Exporters Collo-quium organized by the Caribbean Export Deve-lopment Agency (Carib Export) and held in Barbados, Carib Export Executive Director Pamela Coke-Hamilton charged that the lending policies of regional commercial banks had not, on the whole, been altogether helpful to the growth and expansion of the Caribbean business sector.
Apart from charging that commercial banks in the Caribbean tend not to ascribe value to an idea, the Carib Export Head said banking policies had forced businesses to look to non-traditional sources for investment funding.
Coke-Hamilton’s view is largely consistent with opinions expressed by the business sector—notably medium and small scale businesses—in Guyana over borrowing eligibility criteria and interest rates. Small businesses here have also complained of banks being dismissive of their investment ideas, questioning their viability and by extension their capacity to service loans.
Small business complaints about difficulty to attain commercial bank lending criteria have, over time, driven the local lobby for a development bank which is yet to materialise. What has emerged is a local Small Business Bureau funded by finances provided by Norway which allows eligible borrowers to secure limited collateral cover for commercial bank loans.
At the regional forum, Coke- Hamilton also pointed to what she sees as a serious deficiency in export diversification in the region, asserting that “we still rely on what we did fifty years ago and we have to get beyond that.”
Economic growth for the region is projected at 2.5 per cent for 2014, down from three per cent in 2013, Coke-Hamilton said. Regional GDP for the area was US$132 billion, with the Dominican Republic having the largest share, followed by Trinidad and Tobago, Jamaica and Barbados.
Total exports for the region is US$51 billion, with services representing 62 per cent.