Gov’t eyes full establishment of SME Development bank next year – Dr Jagdeo 

The governing People’s Progressive Party/Civic (PPP/C) is moving ahead with plans to establish a development bank designed to expand access to finance for small and medium-sized businesses.

Speaking at the Arthur Chung Conference Centre on Thursday, General Secretary of the PPP, Dr Bharrat Jagdeo, said the initiative was central to the government’s promise of fostering entrepreneurship.

“Many of you know that we promised to establish a development bank,” Dr Jagdeo said.

He said, “We said we want to make loans to small and medium-scale businesses to allow the growth of these businesses, or the establishment and growth of these businesses in many areas.”

The plan, he explained, was shaped by nationwide surveys and conversations during the PPP/C’s five years in office.

Many Guyanese, particularly women and young people, have struggled to secure funding due to the lack of collateral required by commercial banks.

“Many started a business, but they can’t either grow the business or get the idea translated into a business because of the lack of financing. Many of them do not have the collateral,” Dr Jagdeo said.

He said, “Many are women. Many of them are young people, and we made it clear, we want to create an environment where young people, women and all Guyanese, for that matter, can create, take or make use of the opportunities in Guyana to create income for themselves and their families and to grow their wealth.”

Alongside the creation of the new development bank, Dr Jagdeo said reforms would be introduced to make commercial banking more accessible.

“We will ensure that the formal banking system is reformed in a way that they can have easier access to capital and a greater magnitude,” he said, highlighting new financing tools from invoice discounting to project loans.

Still, the PPP/C leader stressed that some entrepreneurs remain excluded from the banking sector altogether.

“We will also, as promised, create this development bank for a group of people who may not have access to the commercial banks, so that they too can realize the benefits and opportunities of our country,” he said.

The government has already drafted a concept paper, with further discussions scheduled for next week.

“We want an early budget next year where we will be putting a part of the financing to start the bank in the budget,” Jagdeo explained.

He added, “We hope that by the end of next year that this bank will be fully established and functional, that the seed capital would be put in, and all the parameters for on lending these resources would have been in place and met, so that we can start delivering on this promise very early in the new term.”

Dr Jagdeo referenced ongoing talks with India, noting a pledge from Prime Minister Narendra Modi to support Guyana in building its digital finance systems.

“India has great experience in this, in this field, but we are now… defining all that we want to achieve in Guyana, how we expect the system to grow and then either customise an existing software or develop an entirely new one,” he said.

The government’s aim, Dr Jagdeo stressed, is to lower transaction costs and ensure access to financial services across the country, including in remote hinterland communities.