Guyanese Business Professor and Financial Analyst, Floyd Haynes is expected to officially launch the New Hayven Merchant Bank (NHMB) at Lot 304 Church Street by month-end.
According to the accountant educated at Harvard University as well as the University of Oxford, the institution is expected to provide diversified forms of capital that are needed to back the explosive pace of development taking place in the oil and gas sector.
Speaking to what motivated the establishment of the Merchant Bank, Hayes said, “If you listen to President, Irfaan Ali and where he wants to take this country and the pace of development he is looking for there isn’t enough money in Guyana that can finance that investment and therefore it has to come from some other place. Some of it will come from multilateral type money (i.e from the Inter-American Development Bank or the Caribbean Development Bank).
“Some of it will be from friendly governments such as India, China etc. But a large part of that has to be private capital. I saw an opportunity to be a provider of such capital hence the Merchant Bank.”
Haynes said NHMB will be a non-deposit-taking institution that will facilitate capital for business growth and development. In addition to some of the projects the President has in mind, such as more shore bases to supply the growing oil and gas sector, Haynes said private sector entities are bursting at their seams with innovative ideas but the commercial banks are not set up to provide the types of loans they need.
In this regard, the accountant explained that there are two types of capital: there is debt capital which in its simplest form represents a loan; and there is equity capital where one can take a company public and issue shares to raise funds. Haynes said most banks are not set up to do the latter but a Merchant Bank can. In fact, he opined that a Merchant bank can do both or even a hybrid.
“It can create various ways preferred shares, common shares, convertible debt so there is a lot more flexibility. So with my skill and background, I believe I can fill that void,” expressed Haynes.
As regards approval, he said, “I started this about two years ago and I was willing to make sure everything was in line and the Central Bank wanted to make sure it was not issuing a licence to a company on paper so they insisted on seeing of course, proof of funds, that you have a building that has been fitted for bank purposes, that you have security systems, vaults, audiovisual equipment etc. So we have all these things in place.”
The Business Professor said the finishing touches should be completed on the building in a matter of days, following which, Central Bank Executives will do a walk-through before issuing a licence.
Once everything is in place, NHMB would be able to provide equity capital that is needed for shore bases and many other megaprojects for the oil sector. It would also be able to help small companies looking for capital to realize dreams in the oil sector.
New Hayven will also provide financial advisory, investment management services, and alternative vehicles for pension and insurance schemes to invest their moneys.