Although access to credit is not a widespread problem in Barbados, it can be daunting for low-income families and small businesses.
This assessment comes from Ernesta Drakes, Acting Permanent Secretary in the trade division of the Ministry of Economic Affairs, Empowerment, Innovation, Trade, Industry and Commerce.
She was speaking yesterday at the Amaryllis Beach Resort during the opening of a Regional Seminar on Banking, Credit, Financial Services and Consumer Protection in the Caribbean.
Drakes drew reference to research which showed that access to credit could help low-income families to “make more productive investments, increase their incomes and allow them to better cope with negative economic shocks that would otherwise require them to reduce their consumption of basic necessities or sell their assets”.
“However, within the Caribbean context we often see financial services priced out of the reach of this segment of society through the application of exorbitant interest rates simply because this group is considered to be of a high credit risk,” she said.
Drakes went on to say that small and newly established firms were also considered to be high risk and charges by financial institutions were geared to match this presumption.
“We urge lending institutions to see the provision of financial services as a means and solution to foster sustainable economic development,” she noted.
Drakes noted that while Barbados and most countries of the wider Caribbean had in place some form of regulatory framework which provided for redress in cases of unfair practices, it was not all current.
“Some legislation we recognise is somewhat dated and does not appropriately address the growing concerns of consumers in this complex and sophisticated financial environment,” she stated.
Drakes noted that not much was known about the challenges of the business consumer.
“When we speak of consumerism we often refer to individuals and not companies as consumers.
“While there are corporations that are quite able to settle matters within the court system there are some small operators who simply cannot seek redress within law courts as they are financially constrained.”
