– commercial banks, other financial institutions to get on board
the launch of the Micro and Small Enterprise (MSE) project. Also in photo are IDB representative in Guyana
Sophie Makonnen, GBTI CEO John Tracey and acting Tourism Minister Irfaan Ali (Carl Croker photo)
The Guyana government and the Inter-American Development Bank on Monday unveiled a US$10 million project which targets small enterprise development, offering loans as high as Gy$300,000 to start up or expand business, with interest rates below six percent.
The Micro and Small Enterprise (MSE) Development and Building Alternative Livelihood for Vulnerable Groups project, funded under the Guyana-Norway Partnership was launched at the Guyana International Conference Centre, Liliendaal.
An initial tranche of US$5 million will be released for the first phase of the project, which is expected to create 2200 jobs in Guyana.
Loans
The Guyana Bank for Trade and Industry (GBTI) is on board and will assist with providing loans to entrepreneurs through a combination of an interest subsidy and support for a portion of the collateral required for loans, while Republic Bank and the Institute of Private Enterprise (IPED) have been identified to get on board soon.
The project will be implemented by the Small Business Bureau (SBB).
Speaking at the launch, President Donald Ramotar said an impediment for entrepreneurs has always been accessing finance at reasonable interest rates. As a result, he noted that the initiative will create the opportunity for entrepreneurs to set up their businesses with funds that require a much lower rate of interest.
He expressed hope that the initiative will place special focus on hinterland communities, since he believes the project can aid them to grow economically. Ramotar stated that while big investment is needed as a push factor for development in the country, sustainability of development means a big role for the small business community.
He compared large and small businesses, opining that small businesses are in a more profitable position.
“Being small gives you the possibility to be flexible and allows them to take decisions more quickly… they also have a much smaller overhead cost, which allows them to provide goods and services to the customers at large, to big businesses and to government at cheaper costs,” the head of state emphasised.
Acting Tourism, Industry and Commerce Minister Irfaan Ali said banking institutions in Guyana must change their culture to cater to micro and small businesses. Ali underscored that banks need to understand that their perception of micro and small businesses is no longer relevant. He called on these institutions to adopt a new approach, which would meet the needs of these enterprises without a bias to macro businesses and a certain category of people.
Entrepreneurs
The minister assured small and medium-scale entrepreneurs of the small business bureau’s commitment to help push their enterprises to greater heights.
“In our view, we are not looking at this as the end, this is what we call initiating capital that we hope will build many companies and corporations in the future.”
He noted that every programme at the University of Guyana should have an entrepreneurship component, so persons can have a more rounded understanding of this field.
Finance Minister Dr Ashni Singh said government sees facilitating these businesses as a means of building the big companies of tomorrow, since all have the potential to become large.
Dr Singh urged banks and other financial institutions to constantly endeavour to push the boundaries in seeking good new lending opportunities, and to work with entrepreneurs where nurturing and mentorship is required.
He highlighted that the launch is a good manifestation of what can be accomplished under the noble ideals of the Low Carbon Development Strategy (LCDS).
Arduous task
IDB Capital Markets and Finance Division Chief Juan Antonio Ketterer noted that accessing finances is a worldwide issue, common in the Latin American and Caribbean region. He said the IDB has been working with countries on improving access to loans, but the task is arduous although many countries have made much progress.
Ketterer disclosed that Guyana has been ranked 167 out of 183 economies on access to credit by the IDB, but the news may not be all bad.
The areas the project targets include 11 sectors, with the majority being in compliance with priorities under the LCDS. Among them are fruit and vegetable farming and processing, aquaculture, eco-tourism, sustainable forestry and wood processing, business processing and outsourcing, and bio-ethanol businesses.
