Gov’t exploring partnership with banks to share risk for loans above zero-interest level – Jagdeo

Vice President Dr. Bharrat Jagdeo has reassured citizens that the Government of Guyana is actively working to fulfill its commitment to establish a Development Bank that will provide small and medium-sized enterprises (SMEs) with loans at zero percent interest.

He disclosed that work has already begun on structuring the bank, which will have lending programmes in all regions of the country. “We want to be able to leverage the zero interest for the loans up to a certain level,” Jagdeo said during his Thursday press conference.

However, for businesses seeking loans beyond the zero-interest threshold, the vice president explained that government plans to collaborate with commercial banks. “We can leverage it with the commercial bank to do a blending where they can, in exchange for the government to undertake part of the risk, they can get lower interest rates and longer-term credit from the commercial banks. We’re exploring all of these now to move that initiative forward,” he stated.

Jagdeo had previously announced that the Development Bank promised in the party’s 2025 Manifesto will be funded through state resources. When the initiative was first unveiled, President Dr. Irfaan Ali said the bank would support co-financing, improve access to liquidity, reduce borrowing costs, and eliminate collateral requirements that often hinder SMEs.

At his press conference, Vice President Jagdeo also highlighted President Ali’s recent promotion of business opportunities in areas such as data centers, agro-processing, fertilizer production, transport, and logistics. “That is consistent with what we said, we want to migrate business opportunities to other regions of the country, create new sources of wealth creation, support the creation of new business in Guyana and business owners, small business,” he said.

Jagdeo added that the initiative also aligns with the government’s plan to structure some business ventures in a way that allows Guyanese to acquire shares and generate income through government-linked opportunities.

He pointed out that this approach would particularly benefit individuals without substantial capital or those not inclined to start a business. According to Jagdeo, through passive investments in equity, citizens would be able to supplement their income. “Rather than have that income sitting in the bank as savings and earning a return that is significantly lower than they would get from an equity sort of investment,” he stated.

Further, Jagdeo emphasised that the Development Bank and related financial initiatives form part of the administration’s wider framework to expand small businesses, create jobs, build wealth, and increase Guyanese ownership in emerging sectors, including oil and gas. He noted that while government is pushing ahead with these plans, it is cognizant of the fact that the context of the plan is not fully understood by the public, including some of PPP own supporters.