Caribbean Export OUTLOOK 3rd Edition

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Clearing The Hurdles

The Central Bank of Trinidad & Tobago

• Warehouse Receipt Financing is another potential option which allows Agri-business providers to collateralise commodities and use it as a form of pre- export trade financing. Agri-businesses simply pledge their warehouse receipts against various commodities deposited in a licensed warehouse; • In addition, Export Factoring has become a way for private markets to make finance readily available to SMEs.This occurs when banks purchase the receivables of a company at a discount and finance the company’s cash flow to facilitate purchases of inventory. The company is financed via a temporary line of credit and is an alternative to fixed asset-based lending and suitable for SMEs. Revolving Lines of Credit can also be used as well for funding of reoccurring transactions of this nature; • Supply Chain Finance, also known as Supplier Finance or Reverse Factoring, is a set of solutions that optimizes cash flow by allowing businesses to lengthen their payment terms to their suppliers while providing the option for their large and SME suppliers to get paid early; • Other key international export finance solutions have been International Leasing, Project Finance through Joint Ventures and the access of SMEs to Multilateral Bank Schemes such as the International Finance Corporation.

In conclusion, the Caribbean needs a mindset shift accompanied by the necessary policies so that SMEs can benefit from a wider range of finance products. Caribbean SMEs need the support of regional policy makers to initiate this change as traditional financial options have not fully benefitted SMEs. As new sectors arise that can transform our economies, companies must have the necessary financial options at their disposal to enable them to succeed.

Endnotes 1. Micro, Small &Medium Enterprise Development in the Caribbean: Towards a New Frontier” , Caribbean Development Bank (2016) 2. www.centralbank.org.bb/financing-schemes/financing-schemes/details