IDB Report: Better Access to Financing for Firms Could Drive Growth and Jobs in Caribbean

The IDB recently published a report titled “Finance for Firms: Options for Improving Access and Inclusion”, which emphasizes the importance of the link between deeper and more accessible financing systems and faster and more inclusive economic development.

The publication compares the financial systems of six Caribbean countries (the Bahamas, Barbados, Guyana, Jamaica, Suriname, and Trinidad and Tobago) with those of other latitudes and also evaluates the results of company surveys carried out between years 2014 to 2020 to identify key financing challenges faced by firms, including small enterprises and those owned or operated by women.

According to the report, Caribbean companies face major challenges, particularly when compared to their peers in other regions of the world. It also reveals that the COVID-19 crisis made access to financing even more difficult, with small enterprises being the most affected, and women-owned or women-managed enterprises even more so.

Business surveys found that in year 2020 small businesses in five of the six economies included reported facing higher financing costs and more significant barriers to doing business than large businesses. Likewise, firms owned or led by women face more significant difficulties for financing than the others, and that around two thirds of them affirm that access to financing is an important or severe obstacle.

Policies and reforms with the potential to improve financial development, access, and inclusion are highlighted, as well as successful examples of IDB support and collaboration in related areas throughout the Latin American and Caribbean region.