Guyana receives $7Billion loan from World Bank for support in Finance sector

─ $18B to be released over a 2-3-year period

DPI, Guyana, Friday, July 27, 2018

Guyana is now the beneficiary of an approximate seven-billion-dollar Development Policy Credit (US$35M) following the signing of an agreement between Minister of Finance, Winston Jordan and World Bank Senior Country Director, Pierre Nadji today.

Minister Jordan said the loan will support the country’s finance sector.

The development policy credit provides financing on the basis of the actions which Guyana has already undertaken with regard to Financial and Fiscal Stability, including the passage of critical legislation to ensure same.

“The bills that we passed were complex pieces of Legislation but were very much needed to modernise the financial architecture in our country,” he noted.

In addition to the legislation already passed to ensure a stable financial sector, including amendments to the Credit Reporting and Insurance Acts, Minister Jordan said modern Stock Exchange and Public Debt Management legislation will complement them.

The minister added that “these pieces of legislation that we have just passed…in particular legislation in relation to the National Payment System…will see over a period of five years less dependence on cash as the almost sole means of transaction in the country.”

The World Bank Director, while commending the efforts of the government, noted that the credit seeks to stabilise Guyana’s financial sector and prepare the grounds for sound fiscal management.

He said the legislation was passed in time for the release of the credit, “this was really a significant effort on the part of the Government, so we are very pleased and looking forward to doing more of these and help the Guyanese people address the many challenges.”

It is also envisioned, Minister Jordan noted, that the amendments to the Bank of Guyana and Financial Institutions Acts will strengthen the Central Bank’s tools for dealing with the operations of commercial banks.

The World Bank has made available to Guyana $18 billion (US$90M) over the next two to three years and this loan is part of that facility, the Finance Minister disclosed.

He said the ministry and the World Bank are currently in the process of developing another facility specifically to deal with development in the Oil and Gas Sector.

The loan is also provided on the basis that Guyana maintains an adequate macroeconomic policy framework.

By: Stacy Carmichael

Image: Ministry of Finance