– urges banks to accelerate innovation, support economic growth

A STRONG call has been made by President Dr. Irfaan Ali to the banking sector, demanding greater innovation, proactivity, and adaptation to Guyana’s dynamic economic environment. This move is in response to the nation’s efforts to expand beyond its thriving oil industry.

During his speech at the Private Sector Commission (PSC) Annual General Meeting (AGM), which took place at the Marriott Hotel in Kingston, Georgetown, President Ali underscored the vital importance of banks in capital formation and economic development.
“The banking sector has been given one of the most dynamic platforms to support capital formation in this country.

Yet to date, the banking sector has not responded with the speed, efficiency, reliability, and time to exploit the opportunities that are here in Guyana,” President Ali said.
President Ali highlighted the need for banks to move beyond their traditional roles of taking deposits and lending in low-risk environments.

The Head of State also underscored the importance of banks seeking out new opportunities, understanding economic trends, and creating ecosystems that support the country’s growth trajectory.
“The role of the bank is not to take deposits and to lend in a low-risk environment.

The role of the bank is also seeking the opportunity to understand where the economy is going, to create an ecosystem to support where the economy is going and to build upon what is happening in the country,” he explained.

President Ali brought attention to the fact that while certain banks are in line with government initiatives, their execution is lacking.
“Some of the banks are doing an extremely good job at following the initiative, but a very poor job at concluding arrangements…Our local private sector and local leaders are doing a tremendous job in trying to open up opportunities, especially in the non-oil sector, but the speed at which the bank has been operating and processing does not match the type of dynamism that is in the economy,” Dr Ali said.

In a call for accountability and tangible results, President Ali issued a public challenge to the banks.
He declared, “If any bank in this country can point to me, to an investor banker that is employed by the bank, that has created five or six business opportunities and developed five or six business plans to propose to the private sector, I will publicly laud that bank.”

Acknowledging the necessity for self-evaluation and adaptation, President Ali urged the banking sector to review and realign its operations.
“This is no way of being critical of anything. This is just being very frank and very open with you.

As we confront these challenges in the new year, [we need] a new sense of purpose, a new sense of purpose in realigning our outlook in the banking sector and our management in the banking sector, to match what is required in the economy,” he clarified.
This is not the first time President Ali has made this call.

With Guyana being among the fastest growing economies in the world, President Ali has long signalled the need for a “big shift” in the business mindset of bankers and their clients for the modernisation of the sector to propel the nation’s economic advancement.
During this year’s Local Content Summit, President Ali underscored the significance of the summit as a platform for networking and collaboration among key stakeholders, as he highlighted the importance of bringing together capital and human assets to integrate companies and foster the scale necessary for sustainable growth.

With an impressive average economic growth rate of 10 per cent over the past three years, Guyana stands out as one of the fastest-growing economies globally.
The heart of Guyana’s economic success lies in its strategic management of its burgeoning oil industry.

However, President Ali cautioned that realising these opportunities requires a fundamental overhaul of the banking sector. As such, he challenged traditional notions of banking, calling for a paradigm shift towards a more dynamic and investment-oriented approach.

“The banking model needs to change,” asserted President Ali as he urged banks to transcend their role as mere repositories of funds and embrace a proactive stance in wealth creation.
He criticised the prevailing risk-averse culture within the sector, advocating for a more assertive and analytical approach to capital deployment.

“Banks can no longer be a counter that you deposit money, and you get some interest, and you get a business model around that and then you are very risk averse. So, you look at the best opportunity for lending and you’ll lend to that, so your returns are very high, as can be seen in your balance sheets.

“That is not banking, that is a traditional approach to money management. Banking and Finance is an art. It is an art of utilising liquidity in the system through structure and mechanism to grow wealth and create wealth.” President Ali affirmed.
While outlining his vision for a banking sector that actively identifies and pursues growth opportunities, President Ali explained that banks must evolve from passive custodians of capital to proactive agents of economic development.

He said: “This requires a big shift in the business mindset of the bankers and the client. We need to move up this value scale in the banking sector. To have more investment-type bankers who are on a daily basis, analysing the opportunity in the market. This requires some investment from the banking sector.

“It requires the banking sector to use more analytical tools in defining the opportunities for the country. But importantly, in modelling those opportunities and then going out to their clients.”
According to him, with his government’s targeted investment in public capital goods and infrastructure paving the way for sustained growth, he posited that the banking sector in Guyana was poised for expansion, offering significant opportunities for both domestic and international investors.