PM looks to new finance for clean industry, blasts banks

Local individuals and companies interested in investing in green energy projects could soon be doing so with funding from a “green bank”.

Prime Minister Mia Mottley made the disclosure on Wednesday, as she announced that her administration was now in the process of looking at how it could establish a new bank that would be responsible primarily for funding green projects. The work on the establishment of this facility is being led by economist Avinash Persaud, who has given up his role as chairman of the Financial Services Commission.

But during her address to the Barbados Chamber of Commerce and Industry (BCCI) business forum and luncheon, the Prime Minister criticised commercial banks for “watching” people’s money instead of putting it to work.

In fact, pointing out that she was not trying to be “invidious or offensive”, a frank-speaking Mottley suggested that if banks were not prepared to make some changes that would provide an ease from fees, they would be forced to do so through legislation.

“The next thing we are going to hear is that the bank is going to charge you a fee depending on how skinny you are or how fat you are, or depending on how much pressure you put on the ATM or otherwise. It cannot be,” she quipped.

“At the very time we are asking you as a private sector and we are asking Barbadians as individuals to think outside of the box it cannot be that we are going to sit idly by and allow persons to abandon their purpose of financial intermediation and to go into the business of security.

“I am not meaning to be invidious and I am not meaning to be offensive in anyway, but I don’t know how many more times to say it, and therefore I have advised the Governor of the Central Bank that if we don’t get it right then the Government will legislate because it is not fair to the people or businesses in this nation,” said Mottley.

During the BCCI event at the Lloyd Erskine Sandiford Centre, held under the theme Building Bridges for Successful Economic Recovery, Mottley outlined several areas where change was needed in order for the private sector and government to work together to achieve economic prosperity for the country.

The prime minister said in addition to digitalization and a change of attitude, access to affordable capital was also critical to ensuring a successful economic recovery.

Thanking Governor Cleviston Haynes for putting a cap on fees associated with the use of a debit card at an Automated Teller Machine (ATM), Mottley stressed “Banks are intended to be in the business of financial intermediation, not security.

“If I wanted a watchman for my money I would go and hire a security guard, but if we want money to work for the financial services sector and for development then we need to appreciate that a loan to deposit ratio of 55 per cent when the developed world has ratios of 80 per cent tells me that we have people here who are watching people’s money rather than working people’s money. It cannot continue,” said Mottley.

Referring to the establishment of the green bank, Mottley said: “The last two days we were lucky enough to have the head of the Green Climate Fund in Barbados with us. We have started the discussions with them on the absolute necessity for a green bank in order to be able to finance much of what has to be taken in adaption for you as members of the private sector as well as for householders who now have to prepare themselves for a new reality in the 2030s’ and the first decade of the 21st century,” said Mottley.

“I have asked Avinash Persaud who has stepped down as Chairman of the Financial Services Commission to undertake this vital task for the country – to get the green bank going – whether singularly or in partnership with existing or new entities that are about to come,” she revealed.

Mottley indicated that there would be some conditions associated with obtaining financing from the “green bank”. She explained that in addition to the funding, there must be the commitment to “retool and refurbish and retrain”.

She also pointed out that significant work was being done towards the establishment of a digital bank in Barbados.

“Without these opportunities to give our people access to finance there is no oxygen and that is why I maintain that the banks’ appetite for risks has to change because without access to oxygen people will not be in a position either to expand existing businesses or to create new businesses in our country,” said Mottley. marlonmadden@barbadostoday.bb