Early-Stage Banking

Sep 1, 2001

With a lack of foreign exchange, international regulatory pressure and shortage of bankable risks, Belize's young banking system still has serious deficits.

Belize has a population of 232,000, five commercial
banks and a handful of credit unions.

Few Belizean farmers hoping to improve the quality of their citrus harvest bother to apply for a loan at one of the country's five commercial banks. Lending rates average 15%-16% in Belize and are considerably lower than in other parts of Central America.

The trouble is that the bank will require collateral, and since Belize has no reliable system of land records, few farmers have deeds. As a result, few farmers can borrow.

"Titling is a total mess here, as it is in many former British colonies," says Hugo Souza, the Inter-American Development Bank's country representative in Belize. "A lot of farmers in the south can't access credit because they don't have titles to their land. Our land management program is aimed at developing the capital markets." The IDB has approved $7...

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