General Secretary of the People’s Progressive Party/Civic (PPP/C), Dr. Bharrat Jagdeo, on Thursday disclosed that the Development Bank promised for the party’s 2025 Manifesto will be funded using state resources.
Recently, the party unveiled several initiatives for President Dr. Irfaan Ali’s second term in office, all of which are aimed at fueling growth, development, and improving citizens’ livelihoods.
Speaking at his press conference at Freedom House about the proposed Development Bank, which will finance Small and Medium-sized Enterprises (SMEs), Jagdeo explained that the plan is for the institution to be a state-led initiative.
“We’ve decided on the seed capital for the bank and how that will come about already, all of that has been agreed on,” he said.
He noted that the PPP already has a concept in mind, including the capital required to get the bank started and how it will operate. “We’re not like the other parties. We when we make a promise, we know what we’re about. We’re moving towards this,” Jagdeo said.
While the Development Bank will not be a private sector initiative, Jagdeo disclosed that government intends to work in collaboration with the private sector.
He explained that for large projects, SMEs could access part of the capital from the Development Bank and another portion from a Merchant Bank. Jagdeo pointed out that the terms offered by the bank will be vastly different from those of a Merchant Bank, which would help to de-risk loans and encourage merchant banks to lend to SMEs.
Additionally, President Ali had stated that the bank will support co-financing, improve access to liquidity, reduce borrowing costs, and remove collateral requirements that are often barriers for SMEs.
Ali had said, “If you are able to match lending with a zero percent interest rate, we can bring down the interest rate in the commercial bank from 6% or 7% to 3% for SMEs and then when we remove the risks by making the matching rate available, the banks in turn will have to reduce that collateral requirement that is there right now.”
As it relates to large enterprises, Jagdeo highlighted that the government has amended the law to allow international or major financial institutions to establish a representative office in Guyana without setting up a full bank.
“Already City Bank, which is massive, has indicated an interest in setting up a representative office here, so that would help with a lot of the big projects by Guyanese companies and others to get access to that financing for their capital project without having to go to our local banking system,” he added.
