GMSA calls for revolving fund to help push manufacturing

Jul 15, 2022 News

– says lack of access to financing major bugbear to sector

Kaieteur News – Rafeek Khan, the President of the Guyana Manufacturing and Services Association (GMSA), on Tuesday night called for the implementation of a revolving fund to assist local companies that face great challenges in accessing finance.

President of GMSA, Rafeek Khan

The lack of access to loans from the banking sector with reasonable interest rate to local companies, especially medium-sized businesses has been hindering their competitiveness in the oil and gas sector. It is in this vain that, several members in Guyana’s private sector have voiced their concerns about the issue.

Speaking Tuesday night at the GMSA’s mid-year dinner which was held at the Princess Ramada Hotel, Khan explained that one area that has been affecting the business of GMSA is the access to capital. “Access to capital has been for decades a major hindrance to many of our businesses and continuing.”

To this end, Khan noted that he would like to see a revolving fund in place soon, “to help with our businesses not being beggars to an international banks or local banks.” A revolving fund is a fund that is continually replenished as withdrawals are made. It remains available to finance an organization’s continuing operations without any fiscal year limitation, because the organization replenishes the fund by repaying money used from the account.

During his address, Khan also disclosed that recently he had discovered that the banks have increased lending in Guyana by 8 percent. He added, “Which is a good sign of the economy…means the banks are lending more money to businesses in Guyana.”

Many members of the local private sector have been complaining that they are unable to compete with foreign and larger companies in the oil and gas sector – since they have capital.

In the Private Sector Commission (PSC) 2021 report, the President of Georgetown Chambers of Commerce and Industry (GCCI), Timothy Tucker, stated that medium-sized businesses have suffered the most due to the fact that they are not classified as a small business to get support from the government and not large enough to have easy access to money with good interest rate from the banking system.

In the aforementioned report, Tucker was speaking in the capacity as the Chairman of the Finance and Economics Sub-Committee. He penned in the committee’s report that, “Access to finance for businesses, especially medium-sized businesses continue to be a challenge; the Sub-Committee will continue to address moving forward.”

Notably, he had assured that the private sector will continue to engage the government, banks, and key stakeholders on the issue. Similarly, on Thursday April 12, 2022, during his re-election speech as the Chairman of Guyana’s Private Sector Commission (PSC), Paul Cheong, stated that one major thing that he would be pushing for is for better access to financing for companies, especially small and medium-sized businesses.

Additionally, economist and executive member of GCCI, Richard Rambarran, had also stated that local companies need better and cheaper access to finance so as to create competitiveness in the oil and gas industry. When questioned on GCCI’s stance on the issue of local companies’ access to loans with reasonable interest rates from the banking sector. “We have discussed in the Chamber of Commerce, and I will say this because it’s something that we feel very strongly about, we have discussed that there cannot be a successful local content regime that helps to lift the standards of MSMEs [Micro Small Medium Enterprises] in Guyana, without improvement to access the finance for those same MSMEs,” he responded.

Rambarran had noted that when it comes to the technical work of the oil and gas sector or other types of work to support the oil and gas industry, a Guyanese would need access to finance, but more importantly access to cheap finance. He highlighted that the aforementioned will help Guyanese be more competitive in the sector.

“It is no small secret that Guyana is by virtue of the prevailing conditions, not as competitive as some other countries,” he said. He reiterated that access to finance has been one of those bugbears to the local private sector that has really restricted the competitiveness.

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News