— through IDB’s US$7M Trade Financing Facility
— Senior Finance Minister urges IDB to ramp up private sector lending in Guyana

THE disbursal of a US$7 million line of credit to Demerara Bank Limited (DBL) by the Inter-American Development Bank (IDB) through their Trade Finance Facilitation Programme (TFFP) is timely as Guyana continues to grapple the “devastating” effects of COVID-19, which has been compounded by the recent unprecedented flooding.

These were the sentiments shared by Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh, at a simple ceremony held at the bank’s corporate office, located at 214 Camp Street, Georgetown, on Tuesday, to hand over the funding to five beneficiaries from the private sector.

The beneficiaries are two mining enterprises, Pure Diamonds Incorporated and Dinar Trading; two agricultural enterprises, the Golden Fleece Rice Investment and A Cayume Hack and Sons Rice Milling Complex; and the manufacturing giant, Demerara Distillers Limited Group of Companies.

In October last year, DBL was the first Guyanese bank to be incorporated into the IDB TFFP which opened the line of credit to the bank to be used for short-term international trade finance transactions, to support local small and medium enterprises.

Dr. Singh explained that the injection of this liquidity comes at an extremely challenging time for not only the Guyanese economy, but the regional and global economy as well, as the world continues to wrestle with the realities of the COVID-19 pandemic.

“It is to the credit of all involved in Guyana – government and private sector, both on the financial and non-financial side – that we have thus far been able to navigate the COVID-19 crisis without major disruptions, notwithstanding the trauma of COVID-19,” Dr. Singh said.

He explained that if the effects of the COVID-19 pandemic were not devastating enough, over the last few weeks Guyana has been grappling with what he describes as the most devastating flood ever.

DEVASTATING SHOCK

“Demerara Bank is disbursing this facility at a time when our economy really is facing an extremely devastating shock in the form of the 2021 floods which compound the reality of COVID-19,” he said.

“Nobody had any anticipation that we would be experiencing floods such as this. I would like to say that this facility comes at a time when liquidity such as this is extremely valuable and has an extremely important additional contribution to make, bearing in mind what we’re going through today,” he added.

Dr Singh also highlighted that as the Guyanese economy continues the “remarkable transformation” under this People’s Progressive Party/Civic (PPP/C) government with the new oil and gas sector, the government will also place much emphasis on the non-oil economy, and in these regards, he opined that the beneficiaries are appropriate.

“We don’t want to be a country that is dependent on a single productive sector … having witnessed what other countries have gone through, we feel very strongly as a government that a widely diversified economy, and in particular, the very strong non-oil economy is extremely important to Guyana’s future,” he said.

Chief Executive Officer (CEO) of Demerara Bank, Pravinchandra Dave acknowledged the challenging times the world is grappling with; however, he asserted that during difficult times, DBL does not halt operations.

He explained that the bank is aware that the mining, forestry and agriculture sectors are the “priority sectors” in Guyana and disclosed that 25 per cent of the bank’s lending goes towards agriculture.

IMPORTANT PARTNERSHIP

Dr. Singh congratulated the stakeholders as he opined that the disbursal is a “manifestation of an extremely important partnership” between the domestic financial sector, DBL; a major international institution, the IDB and the domestic private sector, the beneficiaries of the grant.

“Somewhere in the background there is government and the role the government plays in ensuring the creation, preservation and continued improvement of an environment conducive to partnerships such as this,” he said.

Dr. Singh explained that the PPP/C, even prior to demitting office in 2015, had always and continues to advocate for greater involvement by institutions such as the IDB playing a greater role not just with the public sector but also with the private sector.

“I am extremely delighted to see this come to fruition, and it is our sincere hope and expectation that we would see more of this going forward,” he said as he opined that the disbursal is also a manifestation of the IDB’s evolving role in Guyana.

IDB Country Representative, Sophie Makonnen, in delivering her remarks, said that “it’s always a pleasure when you see things come from an embryo, an idea, a first discussion and we’re here and the end users are here with us and I think that really talks about success, perseverance.”

She said that the IDB recognises the support and growth of not only the public sector, but the private sector as well, as the private sector is critical and fundamental to the country and the IDB is here to support the private sector through initiatives such as the line of credit provided to DBL.

“Small businesses play a crucial role in the economy because they are the main source of employment … it is true that they account for a small share of GDP [Gross Domestic Product] and value creation … it is fundamental to support small business growth, improve productivity and all the innovation and key sectors that are critical in the diversification of the economy at this point in time,” she said.

Also present at the ceremony was Chairman and founder of the bank, Dr. Yesu Persaud, who reminisced and shared the touching story of the long journey the bank has undertaken to reach to the destination where it is today, since he formalised the concept of the bank and presented the idea to former President, Dr. Cheddi Jagan.