Financial Institution Risk Management: A Concern in Trinidad and Tobago’s Construction Sector
Trinidad and Tobago’s construction industry has been a key driver of national development and economic growth. The Government of the Republic of Trinidad and Tobago has prioritized public and private infrastructure projects to deliver public benefit, making the construction sector a crucial player.
Challenges in the Public Sector Market
Despite its importance, the construction sector is grappling with major issues in the public sector market. One significant challenge is the government’s delay in paying debts to contractors, as highlighted by Outridge and Patel (2020). Their study found that delayed payments were the top issue faced by contractors in Trinidad and Tobago’s construction industry.
Addressing Concerns through Research
In an effort to address this concern, a recent study employed a mixed methods approach, combining positivistic and interpretive analysis methods using quantitative and qualitative data. The research was primarily deductive, with questionnaires and interviews used to collect data. Descriptive data analysis and narrative analysis were also applied in the data analysis process.
Findings and Recommendations
The study’s findings suggest that financial institutions’ risk management processes have a significant alignment with the ISO 31000 risk management standard, indicating a robust use of concepts prescribed by academic literature. However, major gaps remain in current processes, including:
- Communication and consultation with subject matter experts
- Identification of risks impacting financial investments
- Monitoring and review of existing risks
The Importance of Effective Risk Management
As Trinidad and Tobago’s construction sector continues to evolve, it is crucial that financial institutions prioritize effective risk management practices to mitigate potential threats and ensure sustainable growth. By addressing the gaps identified in this study, financial institutions can play a vital role in supporting the country’s development strategy and promoting economic prosperity.
Conclusion
In conclusion, effective risk management is essential for financial institutions operating in Trinidad and Tobago’s construction sector. By prioritizing robust risk management practices, financial institutions can mitigate potential threats and support the country’s development strategy.