GBTI embarks on initiative to increase lending to small and media enterprises


By Kurt Campbell

GBTI[] – The Guyana Bank for Trade and Industry (GBTI) has partnered with the International Finance Corporation (IFC) to strengthen its risk management practices  to ensure the bank’s long term sustainability and build a strong foundation for its small and medium enterprise (SME) lending.

This is expected to help GBTI develop a more client focused, performance guided approach that better serves the needs of the Guyanese population.

It was noted at a press conference on Thursday (January 30) that in Guyana many financial institutions are reluctant to enter into or expand SME lending because of the need to first implement the internal structures and procedures to identify and manage the risks related to these transactions.

The IFC will help GBTI over the next two years to assess its existing policies so as to develop and support the implementation of an Enterprise Risk Management (ERM) framework which will include measures and models to assess and mitigate credit risk, operational risk, liquidity risk, interest rate risk and market risk as well as organizational mapping and training of staff.

According to Chief Executive Officer of GBTI, John Tracey the bank has already invested US $3M in the due diligence process of the project. He added that it will in fact be very costly but could not give an exact figure on spot.

Sergio Selaya, Operations Manager at IFC is confident that with good and improve risk management it will lead to increase lending locally. According to him, risk management practices will help to strengthen the long term growth of financial institutions and improve lending to small and medium enterprises.

While part of the project is funded by GBTI, a major part is funded by the Government of Canada. On this note, Canadian High Commissioner to Guyana Dr. Nicole Giles said it was her government’s pleasure to partner with GBTI in this regard.

According to her, an estimated 65 percent of Guyana’s SMEs are un-served or under-served by the country’s financial system, which limits their ability to grow and create jobs.

“This is a significant economic loss to Guyana especially when we take into consideration that MSMEs account for over 90% of all businesses in Guyana.”

Dr. Giles said SMEs consistently cite access to credit as one of the greatest barriers to flourishing businesses. She added that banks have an important role to play in providing credit to SMEs due to their dominance in the financial sector and the limitations of informal finance.

“We are optimistic that the outcome of this initiative will help GBTI to design a more comprehensive prediction model that is tailored for the SME sector,” Giles added.




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