Access to finance for small businesses is still a challenge for entrepreneurs, says Professor Justin Robinson, but banks should not be forced into lending money for projects that do not fit their business model.
Speaking at the launch of Microloans by Courts Ready Cash at the Hilton Barbados yesterday, the University of the West Indies academic said that, instead, companies should be given incentives to assist small business owners and help “shake up” the financial services sector.
“Barbados has a bank-dominated financial system, and I think our banks have served us well and they are world-class in what they do. But the nature of banks and their business model means that there are a number of potential borrowers and products and projects that are going to be underserved in a financial system that is dominated by banks.
“I think the way to address that is not to try to beat up on the banks or try to force banks into areas that don’t fit their competencies or business models but to incentivise the diversification of the financial system by having new players come in with products and offerings to serve the underserved,” said Robinson.