Dr Ju­dith Mark

The Small Is­land De­vel­op­ing States (SIDS) of the Caribbean are eco­nom­i­cal­ly and so­cial­ly vul­ner­a­ble due to small­ness in terms of ge­og­ra­phy and pop­u­la­tions, cli­mate risks, lim­it­ed di­ver­si­fi­ca­tion and on­go­ing de­vel­op­ments in in­ter­na­tion­al trade. De­spite these short­com­ings,Caribbean SIDS can­not be ig­nored as they con­trol vast ma­rine re­sources, are at the fore­front of glob­al ef­forts to com­bat cli­mate change, en­hance bio­di­ver­si­ty and con­tribute to­wards sus­tain­abil­i­ty in de­vel­oped as well as de­vel­op­ing economies. It is there­fore im­per­a­tive that Caribbean SIDS re­ceive the glob­al at­ten­tion and sup­port re­quired to fu­el their growth.

Tap­ping in­to the en­tre­pre­neur­ial en­er­gy that re­sides with­in these is­land-states presents an op­por­tu­ni­ty for sus­tain­able and in­clu­sive growth.

Why in­clu­sive en­tre­pre­neur­ship mat­ters

In the Caribbean, as it is for SIDS in oth­er re­gions, MSMEs ac­count for be­tween 60 to 80 per cent of em­ploy­ment. A well-func­tion­ing en­tre­pre­neur­ship ecosys­tem pro­vides a plat­form for di­verse groups such as the youth, women and per­sons in rur­al com­mu­ni­ties to play a role in the de­vel­op­ment.

While these groups are at times on the fringes of tra­di­tion­al fi­nanc­ing sys­tems, it is be­com­ing in­creas­ing­ly im­por­tant for them to par­tic­i­pate in the wealth cre­ation that en­tre­pre­neur­ship pro­vides. Em­bed­ding en­tre­pre­neur­ship across com­mu­ni­ties leads to the en­hance­ments of liveli­hood, peace, sta­bil­i­ty and the co­he­sive­ness need­ed to build re­silient economies. To ac­cel­er­ate this process, the long-stand­ing is­sue of fi­nance ad­e­qua­cy and suit­abil­i­ty must be ad­dressed.

The fi­nanc­ing gap af­fect­ing SIDS

The fi­nanc­ing chal­lenge af­fect­ing SIDS is var­ied and mul­ti-lay­ered. Re­ports by the World Bank in­di­cat­ed that there is un­equal ac­cess to cap­i­tal by women-led busi­ness­es when com­pared to busi­ness­es owned and op­er­at­ed by men. Sim­i­lar­ly, youth and mi­cro en­tre­pre­neurs al­so face chal­lenges in ac­cess­ing fi­nance. Bar­ri­ers in­clud­ing un­re­al­is­tic or strin­gent col­lat­er­al re­quire­ments, high in­ter­est rates and the de­mand for his­tor­i­cal fi­nan­cial in­for­ma­tion of­ten lim­it the flow of fi­nance to en­tre­pre­neurs dis­ad­van­taged by con­straints in en­tre­pre­neur­ial and fi­nanc­ing ecosys­tems.

In ad­di­tion, high risk lev­els of many small and mi­cro busi­ness ven­tures, whether re­al or per­ceived and lim­i­ta­tions in the avail­abil­i­ty of spe­cial­ly-tai­lored fi­nan­cial prod­ucts for the MSME sec­tor, cre­ate a fi­nanc­ing gap in many Caribbean SIDS. For en­tre­pre­neur­ship to fu­el in­clu­sive and sus­tain­able growth, busi­ness­es and en­tre­pre­neurs of di­verse pro­files must have eq­ui­table ac­cess to cap­i­tal for start­up and for scal­ing. Fur­ther the cost of cap­i­tal must not be pro­hib­i­tive.

The in­ter­na­tion­al fi­nanc­ing chal­lenge

Giv­en the im­por­tance of SIDS to de­vel­oped economies, in­ter­na­tion­al fi­nanc­ing in­sti­tu­tions like the In­ter­na­tion­al Mon­e­tary Fund and World Bank have in­ter­vened to bridge the fi­nanc­ing gap. There are, how­ev­er, mixed views on the mod­els used and the need for in­no­va­tions in fi­nanc­ing de­vel­op­ment in Caribbean economies. While in­ter­na­tion­al fi­nanc­ing has re­sult­ed in an in­crease in the sup­ply of cap­i­tal, the in­creased flow does not al­ways lead to im­pact­ful fund­ing for the en­tre­pre­neur­ial class or re­dound to the ben­e­fit of the dis­ad­van­taged en­tre­pre­neurs seek­ing cap­i­tal

With­in re­cent times, Caribbean lead­ers have ex­pressed the view that the glob­al fi­nanc­ing ar­chi­tec­ture in gen­er­al is not con­ducive to in­clu­sive growth and re­silience among Caribbean SIDS. At the 79th Ses­sion of the UN Gen­er­al As­sem­bly held in New York in Sep­tem­ber 2024, sev­er­al Caribbean lead­ers lament­ed what they de­scribed as a glob­al fi­nan­cial sys­tem that is dis­ad­van­ta­geous to Caribbean SIDS, and counter to ef­forts at in­clu­sive and sus­tain­able growth. It has been ad­vo­cat­ed that the use of in­come lev­els and cri­te­ria such as size and scale to de­ter­mine qual­i­fi­ca­tion for con­ces­sion­al funds has re­sult­ed in Caribbean SIDS be­ing con­sid­ered not suf­fi­cient­ly poor to qual­i­fy for high­ly con­ces­sion­al funds, yet too wealthy for mar­ket-based fi­nanc­ing at rea­son­able rates.

As ad­vo­cat­ed by Dr Ter­rance Drew, Prime Min­is­ter of St. Kitts and Nevis, at the afore­men­tioned meet­ing, change in the in­ter­na­tion­al fi­nan­cial ar­chi­tec­ture is need­ed as re­silience on­ly oc­cur when the in­ter­na­tion­al fi­nan­cial sys­tem works for the most vul­ner­a­ble states. The Prime Min­is­ter of Bar­ba­dos made re­peat­ed calls as re­cent as April 2026, ad­vo­cat­ing the case for vul­ner­a­bil­i­ty be giv­en greater con­sid­er­a­tion than GDP per capi­ta or debt-to-GDP ra­tios in fi­nanc­ing vul­ner­a­ble coun­tries.

While Caribbean SIDS con­tin­ue to ad­vo­cate for change and lead­ers ex­press frus­tra­tion at the re­sponse to their con­cerns, any analy­sis must con­sid­er the per­spec­tive of the glob­al fi­nan­cial in­sti­tu­tions. SIDS in­clud­ing those of the Caribbean are clas­si­fied as high risks giv­en their vul­ner­a­bil­i­ty to nat­ur­al dis­as­ters and high debt-to-GDP ra­tios, rel­a­tive­ly small projects, as well as lim­i­ta­tions in ac­cess­ing da­ta. These present a chal­lenge for glob­al fi­nanciers to ac­cede to the re­quest for a soft­en­ing of the po­si­tion in pro­vid­ing fi­nance.

Fi­nanc­ing rec­om­men­da­tions for in­clu­sive en­tre­pre­neur­ship

Notwith­stand­ing the ex­ist­ing risks of Caribbean SIDS and the like­li­hood of greater chal­lenges as the world be­comes in­creas­ing volatile and ex­ist­ing sources of in­ter­na­tion­al funds dwin­dle, a so­lu­tion must be found to en­sure that in­clu­sive growth oc­curs. Giv­en the role of en­tre­pre­neur­ship, en­tre­pre­neur­ial fi­nance for MSMEs must be giv­en pri­or­i­ty.

Spe­cial Fund­ing In­stru­ments - The cre­ation of funds for projects with above av­er­age risk pro­files is rec­om­mend­ed. This in­cludes funds for women, youth or oth­er mar­gin­alised groups. The es­tab­lish­ment of cli­mate re­silience funds by in­ter­na­tion­al agen­cies which fac­tor SIDS risks will fa­cil­i­tate the de­vel­op­ment of the blue and green econ­o­my and the com­mu­ni­ties in which they ex­ist.

En­hanced Ca­pac­i­ty and Ca­pa­bil­i­ty – SIDS must en­sure that the na­tion­al en­vi­ron­ments de­vel­op the ecosys­tems that en­sure that in­ter­na­tion­al funds once re­ceived reach the in­tend­ed groups and for the pur­pos­es as bor­rowed. This in­cludes the reg­u­la­to­ry, pol­i­cy, gov­er­nance and in­sti­tu­tion­al frame­works re­quired.

Risk Mit­i­ga­tion Mea­sures – Giv­en the con­cerns of project risks and size as ad­vo­cat­ed by in­ter­na­tion­al lend­ing in­sti­tu­tions, Caribbean SIDS and more specif­i­cal­ly those with­in

Cari­com should use the op­por­tu­ni­ty to col­lab­o­rate on projects to com­bine re­sources for suc­cess.

Al­ter­na­tive fi­nanc­ing mod­els should be en­cour­aged. Fin­tech pro­vides an op­por­tu­ni­ty to pro­vide ac­cess to cap­i­tal to per­sons pre­vi­ous­ly ex­clud­ed from the for­mal sys­tem and to those across com­mu­ni­ties of vary­ing pro­files.

In­creased Do­mes­tic Fi­nance– Giv­en the chal­lenge of ac­cess­ing in­ter­na­tion­al fund, Caribbean gov­ern­ments should seek to de­vel­op mech­a­nisms to in­crease the pool of lo­cal cap­i­tal avail­able for so­cial and eco­nom­ic de­vel­op­ment. This mea­sure will re­duce the de­pen­den­cy on in­ter­na­tion­al funds and at the same time re­duce the chal­lenge of re­pay­ment in for­eign cur­ren­cy.

In­clu­sive growth for the small is­land de­vel­op­ing sates of the Caribbean will not oc­cur by con­tin­ued re­liance on in­ter­na­tion­al fund­ing agen­cies. The ex­ist­ing glob­al en­vi­ron­ment pro­vides an op­por­tu­ni­ty to re­think the chal­lenges as­so­ci­at­ed with fi­nanc­ing for in­clu­sive growth through en­tre­pre­neur­ship. Caribbean lead­ers must take ac­tions to craft in­no­v­a­tive so­lu­tions through mean­ing­ful di­a­logue with stake­hold­ers in­ter­na­tion­al­ly, re­gion­al­ly and lo­cal­ly.

Dr Ju­dith Mark is a busi­ness strat­e­gy con­sul­tant, ed­u­ca­tor, aca­d­e­m­ic coach and ad­vo­cate for in­no­va­tion-dri­ven lead­er­ship, who can be con­tact­ed at ju­dith­m­mark@gmail.com