Credit Access in Belize on the Road to Improvement
Despite having the third highest per capita income in Central America, credit access in Belize is still in need of improvement. With the help of governmental programs, bank expansions and bank partnerships, credit access will continue to improve.
Belize’s GDP increased from $3.082 billion in 2015 to $3.097 in 2016. However, this increase does not accurately depict the large disparity between the rich and the poor in the country. To combat the approximately 11.1 percent unemployment rate and the 41 percent of the population living in poverty, Belize has actively created programs and partnerships to increase credit access that would benefit those in poverty.
In 2012, in order to increase access to financial services and credit access in Belize, the country created a program called BOOST, which stands for Building Opportunities for Our Social Transformation and provides small cash assistance to poor households. The program has helped children in schools and offers services such as savings and micro-loans as a first step toward financial independence. According to a World Bank Social Protection Specialist, BOOST promotes human capital growth, savings and productive investments.
The following year the country partnered with the International Finance Corporation, a member of the World Bank Group, to help establish the first credit reporting system in Belize. The system would allow financial institutions to share credit information and better manage lending risks. The partnership will also help expand access to finances for individual borrowers and small businesses.
The creation of a credit reporting system, along with BOOST, is key to a sound economy and will help reduce the risks of financial institutions, which will lead to lower interest rates, making loans more affordable and more widely available.
With the continued success of programs such as BOOST and the credit reporting system, credit access in Belize will continue to improve and become more available to everyone.
– Amira Wynn