Government implementing new access to credit, mobilising finance – Minister Singh
GOVERNMENT will be implementing new ways in which it can improve access to credit and mobilise the financial sector to contribute to growth and development and poverty reduction.
Finance Minister, Dr. Ashni Singh made the announcement, last week Thursday, when he delivered the feature address at the 30th Annual Conference of the Caribbean Group of Banking Supervisors (CGBS), convened at the Bank of Guyana in Georgetown.
He said there are other initiatives that can be introduced even in a targeted fashion, without compromising the stability of the sector, since Guyana has long recognised that a strong, stable, well regulated, well managed system is an absolute prerequisite to macro-economic growth and development of the country.
Singh posited that the sector has, certainly by most measures, reflected the objectives that Government seeks, which is strength and stability and, importantly, striking the desired balance between promoting and fostering and catalysing growth on one hand without compromising prudence and stability.
He said the local sector has been growing at a most commendable pace and the key indicators have shown same, with the dynamism, particularly growth in credit that has contributed to some of the real expansion seen locally over the last six to ten years.
“We will work with the advice of the regulators on collaboration of the sector itself on a number of targeted initiatives that have seen the Private Sector growing, without compromising the stability of the sector,” Singh reiterated.
CREDIT BUREAU
He said, apart from legislation, like the recently enacted Credit Reporting Act, the Bank of Guyana is in the process of licensing a credit bureau, which he believes is a conventional instrument to promote access to credit.
“We’ve also worked with the sector on targeted initiatives, including lending for home construction, particularly low income borrowers. We have made some fiscal interventions of our own to reduce the cost of borrowing for the purpose of low income housing; we’ve done the same for targeted small business lending,” Singh noted.
He said Government has also enacted fiscal provisions to promote targeted lending for small businesses.
The minister also made reference to the government’s special low income housing programme, aimed at making credit available to Guyanese to improve their standard of living.
Government enacted legislation to remove the corporate taxes on income earned on loans given for low income housing within the same small business programmes, he pointed out.
“This is just one example that Guyana is reflecting on ways in which it can help to promote more affordable lending, while preserving the strength of the sector,” Singh informed.
He said the government is seeking ways and means to improve the lives of its people through improved access to credit, even at a time like this when the Region is facing challenges from the aftermath of the global financial crisis.
Many of the economies in the Region are still in the process of coming up with a strategy for recovery and growth, while Guyana has successfully weathered the impacts of the shocks, the minister remarked.
He noted that the implications for the financial services will not be insignificant, as opportunities for growth in many jurisdictions are extremely limited and degrees of freedom in confronting the challenges are also inadequate.