BRIDGETOWN, Barbados, Monday October 31, 2016 – A senior economist believes the establishment of a credit bureau in Barbados is long overdue. In fact, Dr Justin Robinson said the failure of Minister of Finance Chris Sinckler to fulfill this promise which he made in a Budget presentation about two years ago had left Barbados looking “ancient [and] a little backward”, when compared to other global financial systems.
“One of the biggest challenges in terms of providing financing is having quality information,” argued Robinson, delivering a lecture on Barbados’ Financial System since Independence: Access to Financing and Investment Opportunities.
He pointed out that many countries around the world had either established credit bureaus or some other form of public credit registry to provide a comprehensive record of domestic financial transactions.
“So, for example, if you go to a commercial bank for a loan now as an individual or a business, there is no formal database or registry where they can go and see how much you owe this credit union, whether you’re up-to-date on your revolving fund loan and those kinds of things,” the economist said.
Robinson, who is also a director of the Central Bank of Barbados, acknowledged that there was some concern that such a bureau could negatively affect borrowing “as bankers find out that some of these entrepreneurs have loans all over the place that are not being serviced”. However, he said, such a move would be in keeping with global best practice, and that is one area that Barbados needs to “catch up on”.
As he dissected the island’s financial system, Robinson argued that though Barbados was said to be on par with middle income and high-income countries in providing access to financial institutions, it was “extremely close to the bottom of the class” in terms of efficiency of those operations.
“Today, 50 years after independence, we are actually doing quite well in terms the depth of the financial markets, where we actually exceed Latin America and low-income and middle-income countries,” the Dean of the Faculty of Social Sciences of the University of the West Indies Cave Hill Campus said.
“Where we have major challenges is in terms of efficiency, where Barbados is scoring below the Latin American and Caribbean average, as well as below the low, high and middle income countries.”
The economist pointed to the underdevelopment of aspects of the financial architecture, the distribution of credit, the structure of the financial system itself, and ongoing challenges with equity financing and equity markets. (Adapted from Barbados Today)