Look for regional investments – ECCB Governor

Local investors are being urged to look beyond these shores for investment opportunities even as access to financing for small businesses remain a challenge.
At a press conference on Friday, Timothy Antoine, governor of the Eastern Caribbean Central Bank (ECCB), took the opportunity to remind the public that they are operating in a regional economy, that being the Eastern Caribbean Currency Union (ECCU).
“If you think of Antigua and Barbuda, you’re thinking an economy of the size of about $4 billion and you’re thinking maybe a population of around 92,000.
But when you think about the regional economy which is what the ECCU is, we’re talking $19.1 billion in terms of size of the economy, and a population of about 634,000. So I want to encourage business people, bankers, and citizens in general to think about not just your national boundaries or borders, but think about the possibilities for you as an entrepreneur in the entire space that is the ECCU, that is your market,” Antoine urged.
But access to financing for small entrepreneurs has long been problematic and that’s why the ECCB has embarked on a plan to have a partial credit guarantee corporation set up by July. The idea is for the bank to guarantee up to 75 percent of the loans to small and medium-size businesses.
Financial institutions, mainly commercial banks and credit unions, will apply to the corporation to become participatory members of the scheme, and will in turn be bound by the terms of the credit guarantee programme.
Another move is to set up a credit bureau which, like the credit guarantee initiative, will be realised after the governments across the union adopt the necessary legislation. Adoption of the legislation has been slow, but Antoine said efforts are being made to have the entity established some time next year.
The governor said the caution being exercised by the banks in lending was understandable in the absence of facilities like the credit bureau and the partial credit guarantee scheme. These, he believes, would spur them to be more forthcoming with capital loans.
“And not just banks, we hope that credit unions and other financial institutions will become eligible to also participate in the guarantee,” the governor said.
Antoine said the region’s financial system was too narrow and needed to diversify into instruments like venture capital and mutual funds and the regional stock exchange.
“In the United States of America, 50 percent of the population, one in two persons, have invested in the stock exchange. How many people in Antigua and Barbuda invested in the stock exchange, how many people in the ECCU? I don’t even know the number but I suspect it’s less than 10 percent,” Antoine declared.
According to the central bank governor, a lot of the wealth created in the U.S. and Europe originates from their stock exchanges.
“I want to see a situation where the average ECCU citizen can invest in the stock market quite easily and can expect to create wealth from that market as a matter of course, and create more opportunities for themselves, their families and obviously their countries,” he said.
The banks have their role, Antoine noted, but added that they should not be relied on solely.
“Sometimes we ask too much of our banks and the fact of the matter is they can’t serve all the needs of the financial system,” the governor concluded.