Banks in St Vincent should invest more

The banks in St Vincent and the Grenadines have too much money and need to invest more – This is the view of renowned Vincentian economist, Dr Wendell Samuel.

Speaking at the launching of the discussions for a St Vincent and the Grenadines’ National Development Plan, Dr Samuel said that new investments are crucial for the continued development of St Vincent and the Grenadines.{{more}}

He stated that while the banks complain about not having enough bankable projects many would-be investors are complaining about difficulties they were experiencing in accessing funding.

“St Vincent has the most liquid banking system in the OECS but there is an issue with the movement of finances from savers to investors,” Dr Samuel said.

Dr Samuel noted that interest rates on savings are only three per-cent, which he said further indicated that there isn’t a problem with cash at the banks. He said that St Vincent and the Grenadines’ saving rate is 16% of the Gross Domestic Product, which he termed as “moderate”, “higher than the United States.”

However a SEARCHLIGHT upper management banking source said that while it is true that banks have cash available to invest they could not by-pass their risk evaluation system to “invest simply for investing sake.”

He said that the banks still had to make sure that monies were being invested into fertile ground and it was a case of keeping the cash rather than irresponsibly investing it.

“We examine the economy and look at the sectors which are experiencing growth and projects in those sectors can acquire investments,” the economist said.

He said at present the areas of construction and tourism are looking up so ventures that are linked to these industries will be looked at favorably by the banks. Taxi drivers, and hoteliers are accessing loans with reasonable ease, our source informed us.

While identifying the shortfall in local investment, Dr Samuel in his presentation noted that there was a high level of foreign, direct investment taking place in St Vincent and the Grenadines, which he applauded. He however stressed the need for this to be balanced with a better flow of local investments.

“We need to continue to have access to overseas financing but we also need to better mobilize our domestic financing,” Dr Samuel said.