Development Bank and oversight

Jun 09, 2026 Editorial, News

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Editorial…

(Kaieteur News) – The establishment of a Guyana Development Bank has been widely welcomed as a potentially transformative initiative. For years, small entrepreneurs, farmers, agro-processors and other aspiring business owners have complained about limited access to affordable financing. The prospect of a state-supported institution offering loans to stimulate entrepreneurship and economic growth is therefore an attractive one. In principle, a development bank can play a vital role in diversifying the economy, creating jobs and supporting local enterprise.

But good intentions alone do not guarantee good governance. The proposed legislation governing the Guyana Development Bank contains several provisions that should concern every citizen. If left unchanged, these weaknesses could undermine public confidence in the institution before it even opens its doors.

One of the most troubling aspects of the Bill is the concentration of authority in the hands of the Executive. According to the proposed framework, the Finance Minister will appoint all directors of the bank, including the chairperson and deputy chairperson. The minister will also determine their remuneration and allowances. In effect, the entire governance structure of an institution expected to manage tens of billions of dollars in public resources will be selected by a single political office.

This arrangement is difficult to reconcile with modern principles of transparency and accountability. Public institutions entrusted with significant financial resources should be designed to inspire confidence across society. That confidence is strengthened when governance structures include diverse representation and independent oversight. Yet the proposed legislation makes no provision for participation by the Opposition, civil society organisations, private sector bodies, professional associations or transparency advocates.

The exclusion of these stakeholders is particularly troubling because the bank will be responsible for distributing substantial public funds. The government has indicated that approximately  3 million without collateral and without interest. However, the legislation itself tells a more complicated story. The Bill permits loans to be granted with or without collateral and with or without interest. It does not clearly specify which categories of projects will qualify for concessionary treatment or what criteria will be used to determine when collateral or interest will be required.

Such uncertainty leaves considerable discretion in the hands of the institution’s managers and directors. While flexibility may sometimes be necessary, public confidence depends on clear and transparent rules. Citizens should not have to guess whether they qualify for favourable terms or wonder whether similar applicants will be treated differently.

The eligibility provisions present another concern. Surprisingly, the Bill does not explicitly identify Guyanese citizens as the primary beneficiaries of the institution. The language appears broad enough to permit foreign nationals operating small or medium-sized enterprises in Guyana to access financing. While foreign investment undoubtedly has a role to play in national development, a development bank funded by taxpayers should have a clearly defined mandate prioritising Guyanese entrepreneurs and local economic advancement.

Perhaps the most alarming deficiency, however, lies in the area of accountability. While the legislation identifies several offences relating to false information, obstruction, misuse of funds and destruction of records, it appears to leave important gaps. There is no explicit provision addressing situations where officials responsible for approving loans solicit bribes, kickbacks or favours in exchange for access to financing.

This omission is difficult to understand. Around the world, development finance institutions are particularly vulnerable to corruption because they control access to valuable financial resources. Strong anti-corruption safeguards are therefore not optional; they are essential. The public must be assured that financing decisions will be based on merit, viability and fairness rather than political connections or illicit payments.

To be clear, the concept of a development bank deserves support. Guyana needs institutions that can provide affordable financing to productive sectors and help build a more diversified economy. However, support for the objective should not blind citizens to weaknesses in the mechanism.

The National Assembly now has an opportunity and a responsibility to strengthen this legislation before it becomes law. Independent representation on the board, clearer lending criteria, stronger anti-corruption provisions and explicit prioritisation of Guyanese beneficiaries would significantly improve the framework.

Development cannot flourish where transparency is weak and oversight is absent. If the Guyana Development Bank is to become a genuine engine of national progress, it must be built upon principles of accountability, fairness and public trust. Those principles should be written into the law from the very beginning.

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• Development Bank, Editorial, oversight, small entrepreneurs

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