Latest update June 2nd, 2023 12:49 AM
Mar 23, 2023 News
– urges more creative packages, less hassle
Kaieteur News – Local businesses being able to access financing from banks has not kept apace with Guyana’s rapid development of the oil sector- a situation, which has prevented many to take advantage of the numerous opportunities in the industry.
This is the view of Managing Director of Brass Aluminum and Cast Iron Factory (BACIF), Peter Pompey, who in a recent interview discussing equitable access to opportunities in Guyana, lamented the state of affairs. Speaking to the inhibiting factors stymieing persons wishing to get into business, he specifically cited not only the access to and cost of financing, but the very finance packages being offered. He first drew reference to the fact that all commercial banks domestically are privately owned but the Central Bank, functions as the government’s regulator. To this end, he was adamant that government and the private sector would need to work together to come up with remedies. According to Pompey, “we always have to look at the issue of where we were and where we are now,” referencing the discovery made by Esso Exploration and Production Guyana Limited (EEPGL)—ExxonMobil Guyana—back in 2015 and first oil in 2019. He said, “since Guyana became an oil producer, the acceleration of our development has been substantial and I believe that there are elements of our environment that is still lacking in development parallel with the accelerated movement that is happening.”
As such, he posited it has become necessary for a review of the regulatory policies that govern and supervise commercial banks. This since “they (Commercial Banks) seem to always want to give the impression that it is the Central Bank that is inhibiting them from doing more creative things.”
According to Pompey, “I do believe that the commercial banking system as it is now set, may not provide all requisite tools or remedies that will allow for the acceleration that is needed”. He pointed out further that “I think with the rate we are expected to grow over the next decade we probably need to consider a development bank.”
Expounding further, he sought to differentiate that the difficulties entailed are not only in accessing the required financing in the first place but the kinds of packages available. He cited as example that an aspiring entrepreneur or one looking to expand and is serious about development and transformation, incorporating new technologies, research and development in order to be competitive and join in the acceleration of the growth of the nation, doing such a venture would take at least three years.
The domestic commercial banks, he said, would provide loans with payback periods as little as five years.
He noted that with ExxonMobil and other multi-national companies operating in Guyana, there is a lot that can be learned from them and look towards forming joint ventures and such, that could invite capital and technologies.
Pompey pointed out as example, Exxon’s Centre for Local Business Development (CLBD) which is geared towards assisting locals in accessing opportunities in the budding oil sector, in its gaps analysis, had found that the capital was simply not there, as is required by potential entrepreneurs to support the oil sector alone, much less the other productive sectors in the country.
In complementing a proposed Development Bank to be set up, he suggested a percentage of oil earnings to be used to develop local business so that they can be able to evolve in a fashion that keeps apace with the oil sector.
According to Pompey, “I am of the view that that Government of Guyana in partnership with the private sector should create more revolving fund; use a percentage of the oil, we need to have billions of US injected into what I would call capital technological transformation, the development of new technologies.
This, he suggested was critical for the local businesses to maintain competitiveness and productivity.
“At this rate that we are accelerating at, it requires technological advances;” the human element is one factor and in Guyana, he posited that too is already deficient.
Access to finance by local businesses looking to expand. and potential entrepreneurs wanting to get into business have long voiced, access to finances, as a key inhibiting factor, he reiterated.
As such, he was adamant, this is an age-old challenge and while there has been some policy interventions on the part of government, “I think the banking sector now has to demonstrate the confidence in the business community and recognize that there is a paradigm shift and we want to be a country that’s making things, not trading in commodity and products.”
According to Pompey, the more Guyana can develop its infrastructure and industrial capacity, then it would place the country in a substantially more competitive position.
President of the Berbice Chambers of Commerce, Ryan Alexander, who was also on hand for the discussion of equitable access to business opportunities locally, conceded yes and echoed similar sentiments to that of Pompey, in relation to the changed business environment in Guyana.
“Many persons, are upbeat and enthusiastic about benefitting from the touted opportunities that are being promoted as inherent with the oil and gas sector but keep lamented the access to finance as an existing hurdle,” Alexander said.
UPDATE on Court Case for Full Protection!
Jun 02, 2023Kaieteur Sports – Female player Dinelle Lindee and Andrew Bennett, both from the rapid rising, Rose Hall Community Center Cricket Club, were the latest young cricketers to benefit from this...
Jun 02, 2023
Jun 02, 2023
Jun 02, 2023
Jun 02, 2023
Jun 02, 2023
Kaieteur News – Major fires always seem to occur in Guyana when few persons are around. From the destruction of the... more
By Sir Ronald Sanders Kaieteur News – The report on May 17, from the World Meteorological Organization, (WMO) that... more
Freedom of speech is our core value at Kaieteur News. If the letter/e-mail you sent was not published, and you believe that its contents were not libellous, let us know, please contact us by phone or email.
Feel free to send us your comments and/or criticisms.
Contact: 624-6456; 225-8452; 225-8458; 225-8463; 225-8465; 225-8473 or 225-8491.
Or by Email: [email protected] / [email protected]