ECCB Governor Pleads With Banks To Invest In Women And Young Entrepreneurs For Economic Rebound During COVID-19 Pandemic
Basseterre, St. Kitts, October 8th , 2020 (ZIZ News):
By: Chaïra Flanders
A sound credit network is essential for economic development and a lack of access to credit is a persistent problem that many small businesses in our region face.
This, according to Governor of the Eastern Caribbean Central Bank, (ECCB) Timothy N. J. Antoine who was at the time delivering his presentation during the virtual launch of the Eastern Caribbean Partial Credit Guarantee Corporation (ECPCGC) where he also explained the main objective of the (ECPCGC).
“The primary objective as we understand it, of the Eastern Caribbean Partial Credit Guarantee Corporation is to cause an increase in the availability of loans to Micro Small and Medium Enterprises (MSME’s), thereby expanding access to credit. That is the metric on which this corporation will be judged”, he said.
He said in reviewing the 2020 Doing Business report for the indicator getting credit, most of the ECCU countries ranked 165 out of 190 countries. Dominica was the only ECCU member who ranked slightly better at 152.
Governor Antoine then made an appeal to the Corporation to invest in women and young entrepreneurs if we are to improve as a region and see an economic rebound.
“I make a special appeal to the corporation as a matter of policy to support women in businesses as well as young digital entrepreneurs as we build out our digital economy. Far too often with no track record, no collateral, these prospective businesses have been shut out of the credit space and stymied in their ability to realize their dreams and contribute to raising their families and building our region”, he said.
The Governor noted that another problematic area is evident in the major difference between the sectors where credit is allocated.
“In terms of credit extension and allocation, 50% of credit goes to the personal sector, so that is homes, housing and motor vehicles but get this, in contrast, the productive sectors such as tourism, manufacturing and agriculture get less than 10% each. Evidently, this situation too is highly problematic”, he said.
He reminded that “efficient financial intermediation, broad financial inclusion and private sector Development are imperative for economic growth and development”.
One of the purposes of the ECCB is to regulate the supply of money and credit and noted that it is somewhat ironic that the banking system has excess liquidity but very often refuse to take on the risk of injecting into small businesses notwithstanding the fact that banks across the region are the main credit providers to small businesses. He added that the Development Banks who do have more of an appetite to lend to small businesses do not have the liquidity to lend.
He said however, to alleviate this issue, the Partial Credit Guarantee Corporation will not only work with Commercial Banks but with other sources of financing such as credit unions and development banks.
Country Director of the World Bank Tahseen Sayed, CEO of the ECPCGC Carmen Gomez-Trigg and Chairman of the Eastern Caribbean Partial Credit Guarantee Corporation Board, Michael Spencer and other stakeholders were also present during the launch.
The EC Partial Credit Guarantee is a joint collaboration between the 6 ECCU member states, the ECCB and the World Bank.
The 6 member states include Dominica, Grenada, St. Lucia, Antigua and Barbuda, St. Kitts and Nevis and St. Vincent and the Grenadines.