Cayman Islands Development Bank

Following an overwhelming response to its recent Financial Stimulus Programme 2009, the Cayman Islands Development Bank recently brought a welcome relief from financial peril to 56 local families, saving some from losing their homes and helping others consolidate debts into one manageable commitment. The same programme also provided funding to launch 14 small businesses. These examples demonstrate how, in the wake of global economic meltdown, development banking has never had such an important role to play as it does today, in helping breathe new life in to an ailing economy.

The mission of the CIDB is to “establish a platform from which the CIDB will provide economic assistance to the people and businesses of the Cayman Islands.”
The CIDB was launched in March of 2002 with the mandate of promoting and facilitating economic and social development in the Cayman Islands. The bank predominantly serves people who might otherwise find it difficult to obtain financial assistance, particularly from larger commercial financial institutions. Before Hurricane Ivan the main focus of the bank was on financing tertiary education and housing, enabling many families to become homeowners. Inevitably, after Ivan ravaged the islands in 2004 the bank’s focus shifted towards recovery, helping to rebuild homes and businesses.
After Ivan the bank invested in improvements to its internal infrastructure, automating core processes and employing highly skilled staff, among them an experienced development banker and consultant, who was hired to fine tune the bank’s focus and build its loan portfolio.
The CIDB is headed up by General Manager, Ralph Lewis, a seasoned banking professional of 30 years experience and high aspirations for the government institution he runs. The bank also boasts an energetic and motivated staff with high levels of morale, exemplified by low employee turnover.
The bank’s activities fall into three main categories, student loans, mortgage loans and business loans – key drivers of economic and social development. Under the Cayman Islands Development Bank Law (2004 revision), the CIDB can lend to any Caymanian who qualifies for a loan.
Student loans are not limited to school leavers but are available to any qualifying individual who wants to retrain or return to further education. Student loans can be granted for up to CI$60,000, although typically they range between CI$8,000 and CI$25,000, depending on whether the course of study is in Cayman or overseas. In line with CIDB’s philosophy of empowering Caymanians through personal development, the bank monitors the progress of students throughout their studies and during their transition in to the work place. The bank further assists students by deferring their principal and interest payments or allowing them to pay interest only during the course of study, which makes the monthly financial commitment much more affordable.
Mortgage loans can be made up to CI$300,000 for either the purchase or construction of a house, as well as land and renovations. Exemplary customer service is such an integral part of the bank’s value system that its advisors will regularly visit clients in their homes in order to forge better relationships with them and help guide them through the processes involved in financing their personal goals.
Helping establish and grow small businesses has become one of the most important areas of focus for the CIDB, especially during these challenging economic times. The bank recognises the crucial role that small businesses play in reviving economic activity during down periods and has placed special emphasis on this part of its business in a strategic move to help stimulate economic activity. Loans of up to CI$500,000 are available for qualifying small businesses.
The bank has had a strong relationship with the Cayman Islands Investment Bureau based on natural synergies between the two organisation’s aims. Whilst the bureau offers advice and guidance to small businesses, the development bank helps make their visions a reality. Many of the CIDB’s clients are referrals from the bureau and the partnership between the two is a potent formula for helping Caymanians achieve their goals.
During the last financial year to April 2009, the CIDB racked up some impressive performance statistics, including 183 student loans, 113 mortgage loans and 126 business loans. As of August 2009, the bank had CI$37m in assets and had loaned CI$33m to Caymanians. Going forward the bank has a clear set of goals for the current financial year and a strategic plan in place that will help it achieve them.
The CIDB places a lot of store by its core values of improving the quality of life for Caymanians, careful management of risk and continuous improvement to customer service. Loan officers at the bank undergo periodic training so they can make informed decisions about managing risk and provide the best advice to their clients.
One example of the bank’s commitment to providing high levels of customer service is in its partnership with Cayman National, which enables all CIDB’s clients to conveniently make loan repayments at any Cayman National branch across the islands.
The value the CIDB delivers to its clients does not stop with the provision of loans. Through its counseling services the bank helps educate its clients about managing their finances effectively and avoiding some of the more common pitfalls, in particular relating to debt.
A culture of innovation prevails throughout CIDB’s operations, as it continually aims to find creative ways to assist its clients and increase revenues. Whilst the operation is not for profit, the bank has always striven to break even with as little reliance as possible on subsidies from public coffers. To help achieve this, the bank is continually trying to reduce its costs of doing business without compromising service levels. These cost savings are also reflected in the interest rates the bank charges its customers.
The CIDB differs from commercial banks in that instead of following conventional prime lending rates, it sets its own base rates based on the weighted average cost of funds borrowed to finance its loans. CIDB’s interest rates usually compare favourably with rates from commercial banks and are sometimes even the cheapest available.
The CIDB is also very much committed to the economic and social development of the Sister Islands. The CIDB even has a dedicated office in Cayman Brac, which is open two days per month, as well as a representative who regularly calls on Little Cayman. The bank loaned over CI$2m to projects on the Sister Islands in the last financial year.
Despite the inevitable challenges of gloomy economic conditions the world over the outlook for the CIDB over the coming months and years seems promising.
The CIDB will continue its drive to increase its visible presence in the community and raise awareness among its target group about the products and services that it offers and their benefits to its clients. The bank is looking to ramp up its communications efforts to maintain awareness among its audiences about important developments. Part of this effort will include going into schools and helping to start financial education at an early age in order to help equip Caymanians to manage their finances successfully later in life.
The CIDB will also strive to develop new products and service in its efforts to capitalise on new market opportunities, better serve its customers and increase revenues, whilst decreasing reliance on government subsidies. The bank has set itself the target of increasing its portfolio size by 15 per cent annually and it is hoping to reach a point where it can cover all its operational expenses with fee and interest income alone. The bank is committed to avoiding hikes in operating costs, in particular staff costs and has set itself another target of reducing delinquency levels by 8 per cent to 12 per cent.
Building strategic partnerships with stakeholders will be a priority for the CIDB going forward. In line with the new government’s approach to more effective integration of the work of its various agencies, the CIDB will be looking to improve its dialogue with the Ministry of Financial Services and other public sector financial agencies. The CIDB also has plans to court larger local businesses in the private sector to encourage them to participate in partnerships, which are intended to help develop small businesses across the islands. 
Other plans at the bank include the establishment of a National Credit Reporting Agency and an effective finance unit, upgrading its IT systems and putting in place a framework for deposit taking.
As the Cayman Islands embark upon the road to economic recovery, it is clear that development banking will be a key driver of progress. The Cayman Islands Development Bank is an essential component of the recovery plan, and with sound management, motivated staff, financial stability and a strong culture of innovation and customer service it looks set to be improving the standard of living for Caymanians for many years to come.


The CIDB’s mission is to provide economic assistance to Caymanians
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Paul Byles
Paul Byles is owner and Director of FTS, which provided regulatory, economic and management consulting services. He is an experienced economist and finance professional having worked in the financial services industry for 25 years. He is a former director of a big four consulting firm and a former Head of Policy at the Cayman Islands Monetary Authority. He is author of the book ‘Inside Offshore’ which focuses on the reputation of the Cayman Islands as a financial services jurisdiction and author of ‘Offshore Financial Services: a BVI text’, published in 2014. He serves as an independent director on a number of financial services and local operating firms. He is currently President Elect of the Cayman Islands Chamber of Commerce, having served on its council since 2014.

Paul Byles
PO Box 11048
Grand Cayman KY1- 1107
Cayman Islands

T:  (345) 916 7389
E: [email protected]


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2nd Floor, Governors Square PO Box 31242 Grand Cayman KY1- 1205 Cayman Islands T: 769 3300 F: 769 3301 E: [email protected] W: