Private Sector Overburdened With Debt, Says ECCB Governor LK Hewlett Story Updated: June 29th 2015 at 3:01 pm
Private sector development in the Eastern Caribbean Currency Union is being severely hampered due to large debts that hang over businesses of all sizes. This is according to Sir K. Dwight Venner, Governor of the Eastern Caribbean Central Bank, speaking to banking and development in the ECCU member states in the bank’s Annual Report for the financial year ended 31 March 2015. “Many firms in our jurisdiction are overburdened with debt before they begin their operations and are under constant pressure to repay debt,” he said. “This limits the operations of the private sector to strictly commercial activities with a quick turnover.” Citing lack of equity for start-up and existing businesses as a “fundamental problem” in the ECCU, Sir Dwight said this is a major impediment to their development. Engaging in activities outside the commercial sphere is therefore considered high risk and do not meet the lending criteria of financial institutions, which are the ones in possession of most of the loanable funds. Institutions such as the Caribbean Development Bank are advocating for Public-Private Partnerships as a means for businesses to acquire investment in order to close that funding gap.
