Financing Low-income Borrowers in the Caribbean: Experiences from the Barbadian Microfinance Sector
This paper highlights how Caribbean governments have incorporated microfinance in their economic development efforts. Microfinance has undeniable relevance to the Caribbean region and particularly in the Barbadian context, as demonstrated by its high demand.
Drawing on contemporary practices, the paper examines the challenges faced by the Caribbean microfinance sector, with an emphasis on the Barbadian context. Findings include:
- Government policy initiatives are positive as they reflect a willingness to achieve real social and economic change within the Barbadian society;
- Emerging interest of the Barbadian microfinance sector in increased collaboration and networking between MFIs and related support organizations contributes to an enhanced technical knowledge in microfinance;
- Additional microfinance products such as leasing, crop insurance and deposits serve to lower transaction costs and improve risk management, as does reduced emphasis on fixed collateral via removal of financial regulatory and supervisory biases.
The paper contends that the possible negative consequences of commercialization principles in the new generation of microfinance programs be taken into consideration. With cultural, social and economic adjustment of traditional microfinance to the Caribbean context, the emergence of microfinance in Barbados and the Caribbean from its infancy is highly possible.