August 6, 2010

US$100 million in loans from Libyan bank to “provide loan opportunities for the private sector”

The local private sector along with their Eastern Caribbean counterparts may soon be able to access loans from a Libyan investment bank, which will be capitalized at US$100 million.{{more}}

This in addition to the US$100 million Libyan holding company – Lavico Caribbean Holding Company – which was set up in Antigua last year.

“Think of this: US$200 million in a sub-region where you have a population of about 600,000. Significant monies we are talking about,” Prime Minister Dr. Ralph Gonsalves said, in making the announcement on Tuesday.

Gonsalves, who returned from an official visit to Libya on Monday, said the bank will be based in St. Kitts/Nevis because the Eastern Caribbean Central Bank (ECCB) is located there.

Prime Minister of St. Kitts/Nevis Dr. Denzil Douglas will be “the focal point in this respect” and a Libyan delegation will visit St. Kitts/Nevis and the rest of the region during the second half of September.

The group will study and prepare proposals on common facilities and privileges to be granted to the bank, as a prelude to discussion between the bank and the countries of the sub-region, Gonsalves said.

The Libyan delegates will also examine “the possibility of signing a memorandum of understanding for the establishment for the Libyan Bank for Investment and Trade with the aim of providing funds for trade and investment project and contributing, if needs be, to existing commercial banks,” Gonsalves said.

Gonsalves said the investment bank will provide loan opportunities for the private sector even as commercial banks remain conservative in their lending.

“The private sector, quite correctly, says there’s not a source from which it can go and get monies as easily as they would wish because of the conservatism of the commercial banks in their lending for production purposes,” said Gonsalves, who is also Minister of Finance.

“They prefer to lend, as we all know, for consumer goods, for housing, but not as ready to lend for productive purposes,” Gonsalves said, adding that he is concerned about the development of the private sector. (KXC)