G$100 Million in additional financing for Small and Medium Enterprises
–as Senior Finance Minister signs Loan Agreement with Small Business Development Finance Trust Inc.
As part of the Government’s broad agenda to improve access to financing and to empower citizens to benefit from the massive economic transformation taking place across the country, Senior Minister in the Office of the President with Responsibility for Finance Dr. Ashni Singh, on behalf of Government today signed a G$100 million loan agreement with Small Business Development Finance Trust Incorporated (SBDF) to promote the development and expansion of small and medium enterprises. The signing of the loan agreement follows discussions between His Excellency, President Irfaan Ali and representatives of SBDF.
The G$100 million financing facility will be utilised by the SBDF through the provision of loans at no more than 8 percent interest rate to individuals or companies wishing to develop and expand their small or medium enterprises. The Agreement was signed by the finance minister and Chairman of SBDF, Mr. Sattaur Gafoor during a simple signing ceremony at the Ministry of Finance. Witnessing the signing were Minister of Tourism, Industry and Commerce Oneidge Walrond, staff of the Finance Ministry as well as representatives of SBDF.
Delivering remarks prior to signing and recalling the history of Government’s collaboration with the SBDF to assist small businesses, Dr. Singh said that the SBDF was founded in 2002
And became operational in 2003. He noted that it was the brainchild of Mr. Sattaur Gafoor.
“It started with a capital base of G$21 million of which Mr. Gafoor contributed $11million and then President Jagdeo on behalf of the Government of Guyana contributed $10 million and with that total capital of $21 million, the SBDF embarked on this journey of providing support to the smallest of entrepreneurs in Guyana,” Dr. Singh explained.
Minister Singh related further that since its establishment the SBDF has disbursed 6,835 loans at a total value of $4.5 billion dollars.
“Consider particularly given the modest base with which it began, how many entrepreneurs would have received assistance and how well that portfolio would have had to have performed for the capital base to remain intact in order to facilitate the lending, repayment, relending and repayment and repeated turnover of this very modest capital,” he added.
The Finance Minister emphasized that the SBDF Board which includes two of Guyana’s prominent entrepreneurs (Mr. Sattaur Gafoor and Mr. Hemraj Kissoon) who preside over their very own respective vast family-owned empires, each of which would have started as a very modest family-owned business and grown tremendously into vast empires. As such, he noted that each small business of today is potentially the medium and large-sized businesses of tomorrow.
“That is the environment that President Irfaan Ali is endeavouring to create-step by step-block by block-an environment where every Guyanese person who wishes to set up a small business is able to do so and is operating in conditions where the business can grow, prosper and expand,” Dr. Singh concluded as he noted that SBDF also provides mentoring and advisory-support services to small businesspersons.
Minister Walrond while outlining the many ways in which Government has been providing support to small businesses said that small businesses will now be receiving additional assistance through the entity.
“Today we are adding one more arrow in the quiver or tool in the tool-kit of our mechanisms that we are implementing as Government to support small-businesses’, she said.
“As you know under the Ministry of Tourism, Industry and Commerce we have the Small Business Bureau established under the Small Business Act to help carve out a space of support for small businesses. We have had under the SBB several one-stop shops of training and support for small businesses as well as the help-desk. There is the Small Business Development Fund that’s also been established under the Small Business Act, dispensing loans and grants to small businesses,” Minister Walrond added.
She related further that there is Government’s loan guarantee programme under the Small Business Bureau where Government acts as a guarantor for small businesses facilitating loans for them at commercial institutions. She alluded to the Local Content Act as well which she said is designed to carve out a space for Guyanese Small businesses to be established and to grow in the oil and gas sector.
“This loan facility will complement and not compete with the efforts of the Small Business Bureau which offers a maximum of $500,000,” Minister Walrond explained further.
Expressing gratitude for the Government’s thrust in ensuring that small businesses receive much needed assistance through the entity, Chairman of SBDF, Mr. Gafoor said he considers it an honour that Government has partnered with the entity to lend the SBDF G$100 million to assist small businesses, which he noted will go a long way in assisting the fund.
“The SBDF has grown over the years meeting a cross-section of demands, more particularly those persons involved in agriculture, and this will most certainly help in meeting those demands,” he added.
Government has been consistently supporting small entrepreneurs and, in this regard, in March this year, a $900 million forestry revolving fund for small and medium-sized loggers was officially launched at the Arthur Chung Conference Centre during a ceremony held to commemorate International Day of Forests. At that ceremony, the Senior Finance Minister had emphasised the need for investments in the forestry sector, noting that forests remain an integral part of environmental conservation and that the fund is part of the government’s commitment to increase focus on small, medium and community loggers.
The Small Business Development Finance Trust Incorporated was established in 2002 and its mission is to strengthen the economic base of micro and small-scale sector entrepreneurs in Guyana through increased access to lending, technical support and non-traditional financial facilities.