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Govt. to share risk with commercial banks for loans above zero-interest threshold – Jagdeo
(Kaieteur News) – For loans above the zero-interest threshold that will be offered through the government’s Development Bank catering to Small and Medium-scale Enterprises (SMEs), the government will work with local commercial banks to share the risk for businesses requiring loans beyond that ceiling.
Vice President Bharrat Jagdeo
This was disclosed by Vice President Bharrat Jagdeo.
The vice president had explained that the creation of the State-funded Development Bank will significantly ease the financial burden faced by small and medium-scale businesses. He stressed too that the bank will be funded by the state and not the private sector.
The People’s Progressive Party/Civic (PPP/C) had announced plans to establish the bank as part of its 2025 campaign promises. “The development bank, we are already looking at the structure of that bank. We want the bank to have chapters or lending programmes in all the regions of our country,” Jagdeo said on Thursday at his press conference held at Freedom House.
“We want to be able to leverage the zero interest for the loans up to a certain level,” he added.
While the bank will be operated by the state, the Vice President said there will also be collaboration with stakeholders from the private sector. For businesses requiring loans above the zero-interest limit, Jagdeo said the government will work with commercial banks to share some of the risk.
He explained, “Working with the commercial bank system so that those who need to start small businesses beyond the level that they can get a zero-interest loan for that we can leverage it with the commercial bank to do a blending where they can in exchange for the government to undertake part of the risk, they can get lower interest rates and longer-term credit from the commercial banks.”
Jagdeo assured that government is exploring all options to move the initiative forward, noting that it forms part of the PPP/C’s broader plan to create more opportunities for Guyanese businesses amid the country’s economic boom.
Moreover, he credited President Irfaan Ali’s recent efforts in this regard. “When you think about the framework in which he’s mentioning all of these things in, its consistent with what we promise. Expansion of small business and business opportunities, creating more jobs, creating more wealth, getting more Guyanese to own business opportunities that are based on lucrative government activities, particularly in the oil and gas sector,” Jagdeo said.
He added that President Ali has also been promoting opportunities in areas such as data centers, agro-processing, fertilizer production, and transport and logistics. “That is consistent with what we said we want to migrate business opportunities to other regions of the country, create new sources of wealth creation, support the creation of new business in Guyana and businessowners, small business,” Jagdeo said.
The vice president further noted that the government intends to structure certain business opportunities in a way that allows for public share ownership. This, he said, would enable Guyanese to invest in income-generating ventures tied to government activities. Jagdeo explained that this will be beneficial for persons who may not have large startup capital or may not wish to manage a business directly. “They could then through a passive investment in shares in equity supplement their income rather than have that income sitting in the bank as savings and earning a return that is significantly lower than they would get from an equity sort of investment,” he said.
Further, he acknowledged that many Guyanese, including some PPP/C supporters do not fully understand the broader financial framework being developed, emphasising the need for improved financial literacy. Nonetheless, he assured that the government will continue to move forward with its promises.
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