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

57 in 1977, with Jefferson Reeves, previously a financial analyst with the Bank of Canada, as manager. C.B. Vesawkar, an Indian national, was the consultant from the Commonwealth Fund for Technical Cooperation (CFTC) who advised the Bank on the formation of the department. The ECG Department, charged with helping producers exploit export markets, started with two facilities. The Export Credit Insurance Scheme provided protection to local exporters against non-payment by overseas buyers and losses arising out of circumstances beyond their control. The Export Finance Guarantee Scheme assisted exporters in obtaining pre- shipment finance from commercial banks for the purchase of raw material and for labour costs during production. These were not mainstream central banking functions. Accordingly, Prime Minister Adams described the creation of the new department as proof that the Bank was “... prepared to take on responsibilities which may appear incongruous when set side by side with the traditional concepts of central banking” ( The Advocate, May 1, 1977 p.3). The ECG Department issued its first policies in July 1978. In September 1979, a Credit Guarantee Scheme for Small Businesses was introduced. This was intended to assist small firms with obtaining short- term working capital and protect commercial banks against the high risks involved in extending credit to small businesses. The Export Rediscount Facility was started in December 1981 with a line of credit of US$1 million from the Venezuelan Trust Fund of the IDB. The aim was to allow exporters of non-traditional products to obtain rediscounts from commercial banks at preferential rates of interest. During 1983, the Bank placed a lot of emphasis on capacity building for the Special Schemes. Thanks to a US$10.5 million loan from the World Bank, the Bank established the Industrial Credit Fund (ICF) which enabled banks to provide medium and long-term financing to manufacturing, tourism, fisheries, agro-industry, mining and quarrying. It also used half of a loan facility of $14 million from the US Agency for International Development to launch the Special Discount Window for manufacturing and export industries. 35 Funds were channelled through the commercial banks, with the Central Bank’s discount rate fixed at three percentage points below the weighted average commercial bank prime rate; Chapter 3: Consolidation: 1976 to 1986

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