CDB working to unlock capital

The Caribbean Development Bank (CDB) is intensifying efforts, including the implementation of new programmes, to widen access to millions of dollars in financing and technical assistance for clients in Barbados and its other borrowing member countries.

President Daniel Best gave that commitment here during the CAF Latin America and Caribbean Economic Forum at the Panama Convention Centre.

Financing need

He was concerned that with Caribbean entrepreneurs and businesses having an overall financing need of US$10 billion, there was more than US$7 billion in liquidity, including commercial bank savings, not reaching them.

Best was participating in a panel discussion on South-South Connection: Community Of Latin American And Caribbean States-Africa Partnerships Toward A New Global Leadership.

“In the Caribbean . . . we have in excess of US$7 billion in liquidity in our commercial banking sector sitting doing nothing,” he lamented.

“But what we have also is . . . entrepreneurs and businesses with approximately US$10 billion of ideas that are going nowhere, and we have US$6 billion to US$7 billion in funding that isn’t reaching them, so we have a disconnect.

“We in the multilateral development banking community can’t continue to sit on the sidelines and hope that it is figured out between the banking sector and the private sector and government.”

The CDB boss noted this was why “last year, we developed a trade finance guarantee programme, providing first loss guarantees to the commercial banking sector, for entrepreneurs, for businesses, focused on trade.

“What does that mean? It reduces the risk of commercial banks to invest in these companies, thereby unlocking capital from the commercial banks, but also facilitating the movement of goods and services intraregionally and across the Atlantic, to Africa and to other parts of the world,” he said.

Technical assistance

“We didn’t stop there. We are providing [technical assistance] to those businesses to become ready to move their finances. It’s not an indictment on commercial banks, but just . . . the fact that they haven’t done it very often. Most commercial banks and the loans officers that these entrepreneurs will face have no idea how to appraise these projects.

“So we are actually undertaking training in the commercial banking sector, such that when these new businesses are cleared for loans and they’re going to the bank, officers will know how to appraise them, thereby unlocking trade.”

Best also reported that last month, the CDB’s board approved the Caribbean Community Resilience Fund developed by Sygnus, an equity house out of Jamaica, US$250 million to develop projects in the Caribbean.

“But not just looking at projects within the Caribbean, but providing technical assistance to businesses within the Caribbean to help them prepare their projects and get them to a stage of readiness for capital investment.”

Best also said the CDB was “developing perhaps the most comprehensive community mapping that has ever taken place in the Caribbean, and with that, we will be far more targeted in how we design projects and programmes”.

He said that while now was a challenging time for the Caribbean, including from geopolitical challenges, the region remained “a highly, highly investable place. We have natural endowments in terms of both our tourism assets, but also, of course, commodities.

“We have a highlyeducated workforce, and most importantly, we have stable, democratically elected governments. And not withstanding how this year may have begun for us, it is still a zone of peace in the world,” he asserted. (SC)

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