FINANCE Minister Dr. Ashni Singh said, Wednesday, that prudential requirements, such as legislation and regulations instituted by government and rigidly enforced, have ensured that local financial institutions had adequate liquidity at a time when some of the largest and most reputable around the world are struggling with challenges in the fallout from the global crisis. According to him, the institutions in Guyana have grown and expanded, including expansion in lending portfolios and their physical footprint and coverage.
That achievement, he maintained, is not accidental, but the result of an appropriate policy framework that is in place and has been preserved over the years.
Minister Singh was speaking at a banking and investment seminar, sponsored by the Georgetown Chamber of Commerce and Industry (GCCI), in keeping with its mandate to provide programmes that enhance the capacity of private sector companies through information dissemination and training.
The event, hosted at the Pegasus Hotel, in Kingston, Georgetown, targeted small and medium-sized businesses, to sensitise them also on issues related to accessing investment incentives from the government.
The minister also lauded the growth of private sector credit, which, he said, amounted to $134.6 billion last year and has shown accumulative growth of 84 percent over the past five years.
Singh said growth of that nature is, usually, credited to government since it is government that provides the policy framework and the Central Bank that discharges the supervisory and regulatory responsibilities.
However, he pointed out that it is businesses such as German’s Restaurant, for example, that are driving growth in the sector.
The minister said the private sector is a good barometer of the dynamism of the economy and praised it for its sustained effort to continue growing businesses to expand and borrow from lending institutions.
Canadian High Commissioner, Mr. David Devine, in his remarks, talked about the opportunities available for local businesses to develop trade relations with Canada.

SPECIFIC REFERENCE
He made specific reference to Export Development Canada (EDC) which is his country’s export credit agency that offers financial and risk management solutions to help Canadian businesses expand into the international market.
The diplomat said the top Canadian exports to Guyana are wheat, manufacturing machinery, paper mills, printing ink, dry peas and beans.
Another speaker, Bank of Guyana Governor, Mr. Lawrence Williams examined trends and development in the banking sector for the period 2005 to 2011.
He said total assets in banks at the end of 2005 amounted to $163 billion and, by the end of 20011, that amount grew to $328 billion. Growth was at an annual average of 12.5 percent and deposits grew during the period. From 2005, $140 billion grew at an annual average of 12 percent to reach $274 billion by the end of 2011.
Deposits by individuals at the end of 2011 accounted for 72 percent of total deposits, with the public sector contributing 15 percent, followed by businesses with 14 percent. Private sector credit rose by 157 percent, from $52 billion in 2005 to $134.6 billion in 2011.
Williams said the banking sector has taken steps to improve access to capital by expanding services as well as branch networks. Eleven branches were opened in diverse locations since 2005 and approval was granted for two more which are yet to be opened.
He said the banking sector has remained safe and sound but, for it to efficiently and effectively contribute to economic development, the supervisory authority is exercising as much oversight as necessary to provide that level of assurance.
The Governor also gave a rationale for the proposed introduction of a higher denomination currency note. He said, over the past years, concerted efforts have been made by the Central Bank and the banking sector to promote non-cash forms of payments and settlements. But while both non-cash payments and settlements have grown with greater use of point of sale facilities, telephone and internet banking and the use of credit and debit cards, Guyana remains heavily cash oriented.

PHENOMENAL GROWTH
He said, for the period 2007 to 2011, there was phenomenal growth in currency in circulation and the distribution of the $1,000 note has, consistently, accounted for more than 93 percent of the value of currency notes in use. The $1,000 was introduced in 1996 but, since then, the economy has doubled in size and the currency system no longer reflects the earning structure of the population.
The note is also not convenient for effecting settlement of a wide variety of transactions and, with the demand for currency growing at a faster rate within recent years, there were shortages of the $1,000 bills in 2008, 2009, 2010 and last year.
The obvious dependency on the $1,000 notes puts intense strain on the currency structure and imperils, at varying times, the financial system, Williams revealed.
Last month, Head of the Presidential Secretariat (HPS), Dr. Roger Luncheon announced that Cabinet had given its support for the Central Bank to introduce a $5,000 note.
Other presentations at the Wednesday seminar were made by representatives of the Bankers Association Shaleeza Shaw; Institute of Private Enterprise Development (IPED) Ramesh Persaud and Go-Invest Danpaul Dhanraj.