CARIB | Aug 8, 2022

Caribbean nations must overcome obstacles to financial access and inclusion for businesses: IDB

/ Our Today


The Inter-American Development Bank (IDB) has released a new report urging Caribbean nations to focus on bringing an end to obstacles to financial access and inclusion for businesses, as having more developed and inclusive financial systems could increase growth and reduce poverty and income inequality.

The report, titled Finance for Firms: Options for Improving Access and Inclusion, stresses the link between deeper and more accessible financial systems, and faster and more inclusive economic development.

The publication compares financial systems of six Caribbean countries – Jamaica, The Bahamas, Barbados, Guyana, Suriname, and Trinidad and Tobago – to others from across the world.

It also assesses results of enterprise surveys in 2014 and 2020 to identify key financing challenges faced by firms, including small enterprises, and those that are owned or operated by women.


The report finds that firms across the Caribbean face outsized challenges, particularly when compared to global peers. It also notes that the coronavirus (COVID-19) crisis appears to have further constrained access to financing, that smaller firms seem to face more significant hurdles than larger ones, and that businesses owned and/or operated by women face more severe challenges than others.

It said the challenges companies encounter include high borrowing costs, burdensome collateral requirements, inadequate funding mechanisms, and complex application procedures.

In 2020, at least 76 per cent of firms in Suriname and 72 per cent in Barbados reported that issues such as significant collateral requirements posed major or very severe obstacles to their performance and ability to do business, up from 22 and 35 per cent respectively, in 2014.

In the meantime, in 2020, small firms in five of the six economies surveyed reported high financing costs as a more significant barrier to business than larger firms.

Surveys also suggest that women-owned or -operated firms (WOFs) face more significant financial constraints than other firms, with an average of about two-thirds of these enterprises reporting access to financing as a major or severe obstacle.


The authors proposed several priorities, including ensuring macroeconomic stability and policy prudence, improving the availability of credit information, and promoting credit sector competition, among others.

The new report is part of the IDB’s Caribbean Economics Quarterly series. In addition, it has country-specific sections for The Bahamas, Barbados, Guyana, Jamaica Suriname and Trinidad and Tobago.

This report is in line with the SMEs, gender and inclusion pillars of Vision 2025 – Reinvesting in the Americas, the IDB’s roadmap to economic recovery and inclusive growth in Latin America and the Caribbean.


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