Both Sides of The Coin: The Story of The Central Bank of Barbados 1972-2017

123 Credit Insurance, Finance Guarantees and Rediscounts for Exports The Export Credit Insurance and the Export Finance Guarantee Schemes were two of the schemes whose use declined. With respect to the Export Credit Insurance Scheme, the number of policies in force fell from 33 in 1987 to 15 five years later; there were only five policies at the turn of the century and zero for most of the time after 2009, despite the enhancements made to the facility in that year. A similar trend was observed for the Export Finance Guarantees Scheme that was introduced during 1989. Economic recession, high interest rates on loans, difficulties in getting payments from some countries and a decision by some manufacturers to start operations elsewhere in the region were responsible for these outcomes. Use of the Export Rediscount Facility started to decline in the late 1980s before picking up in 1991 and 1992 but rising liquidity during the mid-1990s effectively ended the banks’ willingness to participate in this initiative. During 1996, when the line of credit with the IDB was not renewed, short-term financing was available from the ICF, but this did not help. Small Business Credit Guarantees When utilisation of the Small Business Credit Guarantees Scheme fell off significantly in the late 1980s, an inter-agency group comprising the BIDC, the BDB, the Barbados Export Promotion Corporation and the Bank was formed with a mandate to give technical and financial advice to 20 businesses that could benefit from the scheme. On the strength of better promotion, incentives and other adjustments to the Scheme, demand for this facility recovered between 1990 and 1997, when the number of guarantees in force reached 26. Among the adjustments were increases in the number of eligible enterprises (1991), the percentage of the guarantee by the Bank (1994) and the maximum limit on loans (1997). During the next eight years guarantees in force doubled, peaking at 58 in 2005, partly Chapter 4: Maturity, Modernisation and Issues of Governance: 1987 and Beyond