SMEs are a key driver of growth and employment in any economy and at least two studies by the Central Bank of Barbados and the University of the West Indies have found Barbadian SMEs require cash and liquidity to grow.
This is a wider point than at first glance it may seem. Such action would improve capital allocation in a dysfunctional economy regularly described as enjoying ‘excess liquidity’. Which is another way of saying banks are unable to loan money on terms they find agreeable – particularly to SMEs. Depositors, meanwhile, enjoy little if any interest on their savings. An NIF could help both.
Funding a NIF – is it even possible in today’s context?