Guyana is poised to receive approximately $126M from the Inter-American Development Bank (IDB) to address the stagnation of microenterprises (MEs) due to challenges in accessing financing for growth.
Thus far, the IDB believes there is justification for the loan application since there are undeniable challenges facing these MEs. These include firm owners’ gaps in business knowledge and limited use of technology, which generate inefficiencies, drive up operating costs and constrain profits available for re-investment; along with the lack of access to affordable growth capital, which puts pressure on firm profits and growth.
The solution proposed by the Economic Development Fund Inc (EDF) which has partnered with the IDB on this matter, is expected to address the business and financial knowledge gaps of MEs in its nine-month Economic Development Accelerator (EDA), currently funded for a limited number of participants by the USAID Eastern and Southern Caribbean Mission.
Guyana Standard understands that EDA clients will participate in practical business management and business leadership development training that includes technical support and coaching from international experts.
The EDA will also provide capacity building for MEs involved in agro-processing and, ideally, with additional support, similar attention would be afforded to other small manufacturers.
It is anticipated that demographically, programme awardees will be approximately 50% male and 50% female. It is expected that awardees will be from most of Guyana’s more populated regions.
Importantly, the USAID grant is also sponsored by GTT, the country’s largest telecommunications provider. The IDB Lab’s contribution totalling USD $200,000 will be structured as a Non-Reimbursable Technical Corporation instrument to support the training, and coaching of MEs as well as the development of the ecosystem to support business growth in Guyana. Finally, USD$600,000 will be structured as a Contingency Recovery Investment Grant (CRIG) instrument that will be used to finance the growth of an initial 120 MEs in Guyana.