The modern infrastructure and development on the tropical Caribbean island of Aruba could not have been put in place without the constant support and financing from the local banking sector.
The Aruban banks work closely with the government, the local population and international investors which led to huge growth in the late 1980s; sustained, steady growth in the 1990s and now again, coming off of the worldwide economic recession, contributed to a growth in GDP of 8.9% in 2011. In fact, its relatively quick recovery from this crisis, with projections for additional growth over the next two years, is a testament to the healthy state of the banking sector in Aruba.
“The crisis proved that Aruba – even its commercial banks – was actually doing the right thing which was quite impressive,” says Marielsa Arends-Croes, Executive Manager of the
Aruba Investment Bank (
AIB), which provides corporate lending, program and project management, and economic and financial advisory services. “We have a very stable banking sector, even though it is small.”
AIB was founded 25 years ago with help from the Aruban government to provide capital for long-term investments and projects.
The government has also used AIB’s financial expertise for the last 25 years to advise them on potential investments.
Moreover, AIB has signed a protocol with the government to stimulate small and medium-sized enterprises (SMEs) in order to help new and existing ventures grow into successful businesses and further foment manufacturing and exports within the country.
“Aruba’s economy is sustained by SMEs,” explains Frendsel Giel, Managing Director of AIB. “Some entrepreneurs have great ideas, but not the funds to support the project so a guaranteed fund will be established by the private sector and financial institutions to assist those entrepreneurs to realize their plans.”
“a guaranteed fund will be established by the private sector and financial institutions
to assist entrepreneurs to realize their plans.” Frendsel Giel,
Managing Director of Aruba Investment Bank |
AIB also works on large-scale projects such as a new water utility plant for which it raised $150 million in capital. The bank also provides financing for large international investors, many of them coming from the U.S., who have strong ties to Aruba through trade and tourism.
Although tourism is Aruba’s major industry, dominating between 50-70% of the economy, both the government and banking institutions want to branch out to more sustainable development, using alternative types of investments like public-private partnerships (PPPs). Through a PPP, a Dutch company has taken on a 10-year investment to supply energy via wind turbines.
Mr. Giel notes: “I would like to align ourselves more with large institutions throughout North America, South America and Europe, and be their scouts for large projects.
Mr. Giel adds that to achieve sustainability, AIB hopes to attract international investors, especially from the U.S., who would commit long term and not expect a quick return, especially when they see the financial stability of the country.
“Aruba is a safe partner for the U.S., and a safe destination for its people,” says Marcelline Richardson, Managing Director of
Aruba Bank, the first commercial bank ever established on the island. “The most important thing for me is sustainable development. We need to create lasting initiatives to sustain this growth, using what Aruba is good at, which is the security of the island, our multilingualism, our closeness to Holland, as well as our location itself.”
Aruba Bank, with assets totaling over AWG 1.3 billion ($2.3 billion), can boast being the largest commercial bank on the island. Founded in 1925 in Aruba’s capital city, Oranjestad, Aruba Bank is a customer-oriented institution that offers retail, commercial, corporate and international banking as well as insurance services.
“Aruba Bank understands because we invest the time to understand. We know that we need to be socially responsible, service and retain our clients, and diversify in order to stay profitable,” Ms. Richardson notes.
She adds that the bank in part uses its profits towards corporate social responsibility (CSR), tackling issues like dengue fever prevention. “If we make money, we should put it back into the economy somehow,” she says. “We are committed and we believe in it.”
Aruba Bank is also developing programs to get the nation’s youth involved in the professional world. “We have professional people here who can mentor the youth,” says Ms. Richardson. “We bring kids in here every year, just to get a taste of working life. They do not have to be aspiring bankers: we want them to see professional life, see the office, and for them to get inspired, motivated, and ask questions.”
In 2012, Aruba Bank sponsored an official trade mission to Brazil, called Mission2Brazil and designed to provide Young Entrepreneurs with the opportunity to realize a business vision.
“I believe the best part of Aruba Bank is the people,” says Ms. Richardson. “If you dream it, it can happen, and we are not short of dreams here. We encourage and reward the dreamers. We will be around for a long time, and like to be a force to be reckoned with on the island.”
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