Latest update October 20th, 2026 10:30 AM
Mohamed warns of development bank corruption risks
…says institution being launched without key safeguards
(Kaieteur News) – Leader of the Opposition and the We Invest in Nationhood (WIN) party, Azruddin Mohamed has sounded an alarm over the government’s intention to roll out the Guyana Development Bank (GDB) in October this year without a robust framework that ensures all Guyanese can benefit fairly from loans up to $3M and that resources intended to benefit those in need are not used to fuel further corruption.
In an interview with this publication, Mohamed said the Opposition, particularly his faction, welcomes any genuine initiative that expands affordable financing for Guyanese entrepreneurs. The freshly appointed Member of Parliament (MP) however stressed that the law, passed in the National Assembly on July 27 and assented to by President Irfaan Ali on July 30 is gravely deficient and fails to set strict penalties for corruption involving the misuse of funds from the Bank.
Leader of the Opposition, Azruddin Mohamed (right) and President Irfaan Ali
Mohamed warned that an October 5 launch date is not a substitute for transparency or proper institutional preparation. In fact, he said government risks rushing the launch and missing a key ingredient for the successful operation of the institution – accountability. The Opposition Leader pointed out, “Every director is appointed by the Minister of Finance, and the legislation guarantees no representation for the parliamentary opposition or any genuinely independent stakeholder.
The law allows the Minister sole power to appoint all five to nine directors, including the Chairperson and Deputy Chairperson, with no requirement of approval from the National Assembly. Mohamed reasoned that a bank capitalised with public money, empowered to lend “with or without collateral and with or without charging interest” at the Board’s discretion, must not be controlled as though it were a partisan lending facility.
In fact, he told this newspaper that opposition involvement in the governance of publicly owned banks is neither unprecedented nor incompatible with professional independence. The Opposition Leader pointed out that in Germany, the Parliament appoints seven members of KfW’s Board of Supervisory Directors, and that parliamentary appointment process has included members proposed by opposition parties.
Similarly, Malta’s Development Bank requires consultation with the Opposition before appointing the chairpersons of both its Board of Directors and its Independent Supervisory Board.
He also noted that in South Africa, the Land Bank’s appointment process formally allows relevant parliamentary committees to nominate Board candidates, although the minister retains the final appointment power. To this end, Mohamed suggested, “Guyana can adopt comparable safeguards without compromising the bank’s professional independence. A bank funded by all Guyanese must work fairly for all Guyanese and not only for those with the right connections.”
Shifting his attention to offences, he said the legislation is weak in ensuring banking officials face penalties for seeking or accepting kickbacks to approve, accelerate, or influence a loan. He said that the Act also imposes the same G$5 million to G$10 million fine for offences ranging from providing false information to the deliberate misuse of the bank’s funds, without any penalty proportionate to the amount diverted.
Mohamed added, “For serious insider corruption, a fine without express provision for imprisonment, confiscation, or permanent disqualification risks becoming little more than a tap on the wrist. Nor does the legislation establish a protected complaints mechanism or independent investigation process.”
The Leader of the Opposition argued that these safeguards should have been expressly built into the bank’s governing framework prior to it becoming operational. He acknowledged that the law only provides for offences such as providing false information, obstruction, record tampering, improper disclosure, and misuse of the bank’s assets.
The leader said, “We support financing for small businesses, but access must be fair, transparent, and protected from political favouritism, corruption, and cronyism.”
During a press conference on Monday, President Ali announced that the Bank will become operational by October this year. He said this will provide US$100M in financing for businesses.
Previously, leader of the A Partnership for National Unity (APNU), Aubrey Norton indicated that the group will table amendments to the recently passed law to govern the Development Bank. Norton explained that while the party supports the idea of a development bank, he believes the current framework to manage the institution makes it more of a “slush fund” to support those close to the ruling administration.
“What we are seeing is not a development bank, this looks like a slush fund that the PPP can use to give PPP people what they want and continue the process of discriminating against those who are not linked to the PPP,” he said.
The Guyana Development Bank
News of the financial institution sparked excitement among Guyanese as the government marketed the facility as one that would offer zero interest to Guyanese on loans up to $3 million with no collateral required. The legal framework to govern the bank however reveals a different picture than that promised by government.
According to the legislation, “Subject to the other provisions of this Act, the Bank may – (a) assist small and medium-sized enterprises in establishing, carrying on or expanding their operations by providing loans with or without collateral and with or without charging interest.”
It does not clearly outline what specific projects will require collateral or attract interest and at what specific rates.
The law makes no provision for any nominees to be submitted by the Opposition, civil society or any transparency bodies, raising concerns over the direct control of billions by the administration and the likelihood of selection based on “political alliance”.
The involvement or appointment of individuals stemming from these sections of society will undoubtedly provide an added layer of scrutiny with more eyes overseeing the rollout of billions of state resources.
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