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

127 Housing Credit Fund During 2004, the Bank assumed responsibility for the Housing Credit Fund (HCF) which was previously managed by the Ministry of Housing, Lands and the Environment. The HCF provides funds to financial institutions for on-lending to individuals. In 2014, the Bank transferred the operation of the HCF to the FEEC Department in line with attempts to streamline all of its financing facilities. Mixed results were recorded for the HCF. After a full year, the Fund had disbursed loans totalling $9.3 million, its net income was $4.6 million and its net worth was $133.8 million. Loan approvals rose to 16 in 2008 but, in the face of the economic slowdown, fell to an average of four between 2009 and 2011. During the five years ending in 2016, there were only two approvals totalling $1.05 million (in 2015). Despite these developments, repayment of principal remained buoyant, helping to sustain net income for most of the time, but during 2016 there was a 50%decline compared to the figure in 2015. Barbados Investment Fund As it tried to adapt to the changing requirements of the domestic economy, the Bank introduced a number of new schemes. In June 1992, the Barbados Investment Fund (BIF) was created to encourage new equity investments, with start-up capital of $6 million from the Bank ($5 million) and Caribbean Financial Services Corporation. The BIF started out spectacularly and by March 1994 had used up all of its working capital. During 1996, the Fund achieved its initial investment target of $6 million and the Bank made another $3 million available. Its rapid success was linked to the access it gave to a wide range of activities, including IT and sound reproduction. By the end of 2000, the BIF had invested $10.6 million in 29 projects and the Bank’s investment in the Fund stood at $11 million; a review of its operations in 2001 revealed that it had done much to make equity capital available to small and medium-sized projects. By 2006, the portfolio included 50 projects, with a total outlay of $21.6 million. During the mid- Chapter 4: Maturity, Modernisation and Issues of Governance: 1987 and Beyond