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Financial Development and Inclusion in the Caribbean

Chuan Li and Joyce Wong

No 2018/053, IMF Working Papers from International Monetary Fund

Abstract: Many Caribbean financial systems are relatively well developed for their size but benefits are concentrated in a small part of the population. In several large countries, the financial development levels are below what is warranted by that country’s own macroeconomic fundamentals. SMEs, in particular, remain severely credit constrained, and data to inform better analysis remains scarce. Using available data, this paper takes stock of the current state of financial development and inclusion in the Caribbean region and, based on a quantitative general equilibrium model, examines potential trade-offs between growth, inequality, and financial stability—all critical considerations when policies are designed. A case study for Jamaica is examined in detail.

Keywords: WP; firm; participation cost; cost; market; interest rate; Financial Systems; Latin America; Caribbean; Financial Inclusion; Financial Development; firm employment distribution; leveraged firm; fixed cost; intermediation cost; proportion of firm; fewest firm; medium-sized firm; Financial sector development; Credit; Collateral; Income inequality (search for similar items in EconPapers)
Pages: 24
Date: 2018-03-13
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Citations: View citations in EconPapers (3)

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Handle: RePEc:imf:imfwpa:2018/053