MINISTER of Business Dominic Gaskin said the administration is open to the ideal for the establishment of a development bank here, but noted that the idea has to be properly thought out. Access to financing by small business has been a major challenge, with many, including some players in the agriculture sector calling for the establishment of such a facility to give them much-needed support to develop and generally to shore up the business environment.
Speaking with the Guyana Chronicle, Mr Gaskin acknowledged that while access to financing for small businesses has been a problem, he said some times the problem has to do with the kind of small business that seeks financing. Banks examine the feasibility of proposals that are put to them and would offer financing if proposed projects are viable.
“Yes, there is room for a development bank in a developing country; there are however a number of factors that need to be considered as well as business models before such a facility is established here,” he said.
Small business operators at a forum hosted by Go-Invest in July at the Arthur Chung Conference Centre made a pitch for the establishment of such a bank. They said it would support their operations, but more importantly, offer financing at concessionary rates.
For Gaskin, the idea is not a new one, and it is not a bad one at all, but he said like any good idea, it has to be properly thought out before it is implemented to avoid a nightmare.
The matter, he said, was discussed by Finance Minister Winston Jordan, who had pointed out that such a facility need not be a physical bank, since the work can be executed through a policy arrangement with an existing bank.
A private bank, he said, could carry out the mandate of the development bank and by doing so, it would save the government millions in dollars in building a facility and then having to employ scores of persons to manage it.
For now, he said the idea is a concept which has to be developed and the administration is very open to the idea. At the end of the day, he said the government has to ensure that whatever it does, it does not lose money.
Close examination
Mr Gaskin was candid in pointing out that all the industries which would be supported by such a bank will have to be closely examined to minimise risks, since some sectors are more prone to default than others.
“The products and services will have to be tailored to meet the needs of those sectors. We would not want to get into a situation where we are lending money and the borrower is not paying back, or is in no position to pay back,” he told this publication.
Small businesses have been touted as a means of generating employment and alleviating poverty, and with support, many of them could significantly expand their operations. Many small operators contend that such a bank could be of great help to them, a view the minister supports, but said all angles of business have to be studied.
“The government is open to exploring all possibilities and ideas that can help to alleviate poverty and unemployment, but such a bank is not something that you jump up and do. It requires the right studies to be conducted and the right model for Guyana,” Mr Gaskin said.
He added: “If it is small businesses we are looking to promote, we have to understand what are the challenges facing small business before offering financing. Financing is an issue when it comes to getting small businesses off the ground, but it is not the only factor. If we are asking the government to invest in a development bank, targeting small business, then we really need to understand the small business environment and the challenges of the sector, so that we know that concurrently that we are also investing in other areas that would improve the environment in which the small businesses operate. This will create a greater chance for success.”
Presumably, the minister said, the intention of setting up such a bank is to give businesses the kind of financing the need to grow, be profitable, employ more people and to pay their taxes.
“So, yes, a development bank is a good idea but it will only work if it is accompanied by investments in a number of other areas that go hand-in-hand to making the whole thing work,” Mr Gaskin told the Guyana Chronicle.

By Tajeram Mohabir