Governor of the Central Bank of Barbados Dr DeLisle Worrell has strongly defended the country’s credit worthiness, saying Barbados had a “perfect” record of honouring its debts.
His comments came at this week’s launch of the $75 million Enhanced Guarantee Fund, during which a member of the audience asked about the likelihood of a commercial bank granting loans to individuals under the scheme.
The fund was established to assist small and medium-sized businesses obtain loans from financial institution which will act as intermediaries, evaluating and approving the loan applications.
The Central Bank Governor acknowledging that the small and medium sized enterprise sector had difficulty accessing financing, but he predicted the fund would work because of its appeal.
“The thing that is going to make this thing work . . . is that there is something in it for everybody,” said Worrell
The chief monetary policy advisor contended that the commercial banks wanted to make money but were holding back for a number of reasons, including concerns about Government’s credit worthiness.
“That doesn’t make any sense. The Barbados Government has a perfect credit record; Perfect. One hundred per cent. Never being late on any payment on any aspect of its debt in my experience working in the public sector of this country, domestic or foreign,” said Worrell.
He said the banks operating here were also constrained by their head offices and regulators that did not know the local situation, and that even locally, bankers and regulators did not understand some of the enterprises, particularly the cultural industries and information sectors.
“So I am saying it is a market economy. It is not going to be laid out for you. What we are doing is providing additional levers.”
Worrell stressed that the new scheme would reduce a number of risks associated with granting loans to businesses, and he encouraged entrepreneurs to persevere in the face of difficulty accessing funds to launch or grow their businesses.
“Every successful entrepreneur will tell you that it is about persistence, it is about believing in your product, it is about the willingness to go the extra mile for every aspect to what you need to put it together,” advised the economist.