Govt mulls return of development banking
─ to assist small, medium businesses, heads of single households
DPI, Guyana, Monday, February 11, 2019
Government is considering the re-establishment of a Development Bank in Guyana to serve nontraditional small and medium businesses, that have limited access to financing from the traditional banking system.
Minister of Finance, Winston Jordan said on Friday that there remains a challenge for many small and medium-sized operations in accessing funds from lending agencies, for either the startup or maintenance of their business.
With assistance from the Caribbean Development Bank (CDB), the government undertook a study to determine the feasibility of reinstituting such a bank or a mechanism that could lend directly to small and medium businesses.
The minister said the consultant has already completed his report and has made some recommendations. The government will look at how those recommendations can be implemented.
The People’s National Congress (PNC) government had established a number of development institutions and banking agencies including the Guyana Agricultural and Industrial Development Bank (GAIBANK). However, it was closed in the early 1990s.
“No baby walks without a little help from parents, so similarly small and medium businesses need that help to help them grow into larger businesses,” Minister Jordan said.
In the interim, however, the Finance Minister said the government has been assisting the Small Business Bureau (SBB), through the Small Business Fund. In 2018, the government had pumped some $100M into the fund. Another $100M was put into the fund this year. That is in addition to the Sustainable Livelihood and Entrepreneurial Development (SLED) Programme which has some $250M for small business grants.
“Again, recognising the fact that single parents and single households have extreme difficulties approaching any banking institution in Guyana for a loan to a small business,” he said.
Meanwhile, Minister Jordan said while Guyana is a member of the Islamic Development Bank (IsDB), it has not joined the private sector arm. This is because Guyana is also a financial member of the Inter-American Development Bank (IDB) and the World Bank.
Image: Jules Gibson.