Banking system shortcomings hit small and medium businesses hard in the Caribbean.

By Zaya Williams

The Caribbean Association of Banks (CAB) has sounded the alarm over the adverse effects of the region’s banking system, with small and medium-sized businesses bearing the brunt of the issues.

The CAB, a representative body for the sector, has highlighted many concerns, including onerous requirements and protracted processing times that plagued the entire region.

Of particular concern to the CAB is the impact of these challenges on smaller businesses, which form the backbone of Caribbean enterprise and play a significant role in the region’s economic activity.

The association underscored the vital need for the banking and financial services industry to cultivate an environment that supports these businesses.

The CAB’s concerns align with a growing sentiment among consumers frustrated with the red tape and inefficiency prevalent in the banking sector.

Just last week, Timothy Antoine, the head of the Eastern Caribbean Central Bank, acknowledged the need to improve account opening procedures in Antigua and Barbuda and the wider region. Many Caribbean residents continue to rely on cash transactions due to a lack of bank accounts or limited access to functional ATMs.

In response to these challenges, the CAB has expressed satisfaction with the increased efforts to promote moveable-asset based lending. This innovative approach allows individuals and small business owners to use assets like cars, livestock, or manufacturing equipment as collateral for loans, facilitating improved access to finance.

Furthermore, the CAB applauded the strides in adopting technology to enhance banking efficiency, reducing long queues at physical branches. The association encourages the public to leverage online banking for various transactions, such as utility bill payments, account transfers, and salary disbursements, whenever feasible.

However, the CAB acknowledged that there is still some reluctance among customers to embrace online banking fully.

In light of these concerns, the CAB calls on banks to reconsider their burdensome requirements for opening new accounts, recognizing financial exclusion’s far-reaching and detrimental consequences.

According to the latest figures from the Central Bank, nearly one in five people in Antigua and Barbuda do not have a bank account.

The CAB’s warning serves as a crucial reminder of the pressing need for the Caribbean banking industry to address these challenges and create a more inclusive and efficient financial ecosystem for all residents and businesses in the region.