–more capital, partnerships to be unlocked, President Ali announces

GUYANA’S financial system will soon be upgraded with the latest legislation, as the government seeks to make amendments to its Financial Institutions Act (FIA) to facilitate the modernisation of the country’s banking sector.
This is according to President Dr. Irfaan Ali during a press conference at State House on Thursday.

The Head of State said that the amendments will see the country’s banking sector being aligned with international standards.
With the country’s economy rapidly expanding, Guyana has been attracting the interest of more “sophisticated” financial institutions and systems.
“We have requests from international banks to have a presence here, and we have the issue of mobilising capital and having capital formation in the system. Soon, you will see, we will be bringing to Parliament a Bill to amend the Financial Institutions Act to ensure the following: Further compliance with international banking standards, the basic core principles on banking supervision,” the Head of State said.
The amendments, he related, will take Guyana to the “top tier”, beyond any other jurisdiction in the region.
“We are going to be adopting the latest legal framework, the latest rules, the latest regulations, the latest principles governing the banking sector to enhance the mechanism for the transfer of assets of financial intuitions pursuant to a business transaction,” he added.
Further, Guyana will allow foreign financial intuitions to have representatives’ offices here.

Dr. Ali, however, said that while representatives’ offices will not be allowed to carry out banking or financial business, they could offer their services that will be stimulants for direct investments by connecting capital to investment opportunities.
“What you see globally now is a lot of the mainstream financial intuitions are going out of retail, and they are setting up more of these representatives’ offices that look at investment opportunities, matching capital, creating wealth, wealth management and all of these things,” he said.
The amendments will further see regulatory oversight, and ensure accountability by the licenced financial institutions in setting fees and charges for services offered.
The President said that this is aimed at keeping the market fair, and engendering financial inclusion.
The proposed amendments will also include the removal of some consultation requirements with the Minister of Finance, giving banks more independence by enabling more effective consolidated supervision and cooperation among supervisory authorities.
In addition to this, sanctions for non-compliance by financial intuitions will be increased.
STABILITY AND WELLNESS
Further, owing to critical policies implemented by the government, the country’s financial system has been regulated over the past four years, the Head of State said, while highlighting a number of indicators, examining the stability and wellness of the country’s financial system.
Guyana, he said, has recorded a significant growth in credit to the private sector, with the total growing from $259.9 billion in 2020 to $376.1 billion at the end of 2023. This, according to the President, reflects a 44.7 per cent increase.
“What that tells us is that there is expansion in the private sector that there is trust in the policy framework of the country, and that there is confidence in the private sector and by the private sector in investing in Guyana,” the President said.
Meanwhile, from 2020 to 2024, the Inter-American Development Bank Invest (IDB Invest) has authorised 14 transactions in Guyana, totalling US$173 million, targetting the hospitably sector, the oil and gas and education.
This, Dr. Ali said, highlights the diversified nature of investment, and these advancements signify the confidence of both local and international investors.
Guyana has also recorded an increase in its low-income mortgage loan ceiling from $8 million to $20 million.

And in supporting the reduction in the cost of financing for particular sectors, such as the agriculture sector, interest rates on loans were reduced from eight per cent per annum to 3.5 per cent for loans up to $500,000 and five per cent for above.
In 2020, non-performing loans had peaked at $32.9 billion; it has now been reduced to $13.4 billion which signifies a 59 per cent between 2020 and 2023.