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

126 During the seven-year period ending in 2006, the average annual value of approvals and disbursements was $13.6 million and $10.4 million, respectively. With high liquidity in the banking system and a reduced demand for credit, annual approvals and disbursements averaged only $8.5 million and $8.3 million, respectively from 2007 to 2013. There were seven approvals amounting to $0.8 million in 2015 but none in the following year during which disbursements also declined. When the Fund assumed responsibility for administration of credit under the Livestock Development Project in 1994, some $0.9 million and $0.8 million was contributed, respectively, by the Government of Barbados and the European Economic Community. However, there were only a few loans for this activity and in 1999 it was transferred to the Rural Development Commission. In addition to regular contributions from the Bank, other capital inflows during this period included the last instalments of $9.0 million and $6.8 million from the loan facilities with the World Bank and European Investment Bank, respectively (1993), and $5.9 million in reimbursements under a lending facility with the CDB (2008). For most of the time, the tourism sector absorbed the majority of the disbursements from the Fund; indeed, in 2002 an equity investment of $20 million was made in the Tourism Loan Fund. Nonetheless, reasonable amounts of resources went to firms in manufacturing and agro-industry. The Fund also invested $1million each in the Enterprise Growth Fund and the Agency for Micro-Enterprise Development. Towards the end of the period health services (in 2009, 2011 and 2013) attracted some of the loans. The ICF’s financial position remained strong throughout the review period, with its net worth rising from $24.2 million in 1988 to almost $135 million by 2013. Net worth displayed sharp increases from time to time, mainly on the strength of capital contributions. This was evident between 1991 and 1993 and between 2000 and 2004, when increases in net worth of $17.4 million and $23.5 million, respectively, were recorded. Between 2013 and 2016, net worth declined by just over $18 million to reach $116.6 million. This reflected a slowdown in loan applications, a result of the high liquidity in the banking system, and lower income due to reduced deposit rates and a smaller loan portfolio.