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Demerara Bank Limited Chairman and founder Dr. Yesu Persaud (centre) with Chief Executive Officer of DBL, Pravinchandra Dave (second from left), IDB country representative Sophie Makonnen (second from right) and others (Photo by Orlando Charles)

Demerara Bank Limited Chairman and founder Dr. Yesu Persaud (centre) with Chief Executive Officer of DBL, Pravinchandra Dave (second from left), IDB country representative Sophie Makonnen (second from right) and others (Photo by Orlando Charles)

October 31, 2020

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Demerara Bank Limited (DBL) yesterday joined the Trade Finance Facilitation Programme (TFFP) of the Inter-American Develop-ment Bank (IDB) and will now have access to a US$7 million line of credit with which it can provide financing to a host of sectors, including the oil and gas industry and small businesses.

According to Chief Executive Officer (CEO) Pravinchandra Dave, the US$7 million first tranche, which has been released, will be used to diversify the sectors which can access loans and technical support from DBL for short-term international trade finance transactions. These sectors will now include the oil and gas industry as well as the forestry, mining and agriculture sectors.

“The facility will be extended to the small scale entrepreneurs, small businesses for pre-shipment facility, for post-shipment finance. There are a lot of suppliers of services to the oil and gas companies which are not able to provide the collateral to the bank and what we can do [is] we can create a charge over the receivables and we can provide the facility to them (customers),” he explained, following the signing at the bank’s Camp Street headquarters.

Given the current context of high volatility in international markets and macroeconomic pressures from the COVID-19 health crisis, this line of credit will help support existing industries and new and emerging businesses in sustaining productivity and job creation, it was explained.

He also noted that the line of credit, which is revolving, will allow the bank to increase foreign trade products to its small and medium-sized clients, adjusting its menu of products to the current context of client demands.

Founder and Chairman of DBL Yesu Persaud also indicated that the bank will be open a new branch at Mahaica so as to extend the reach of its services.  DBL is Guyana’s only indigenous bank and opened up in 1994.

The TFFP programme is implemented by IDB Invest, a multilateral development bank (member of the IDB group) which aims to provide financial and technical support for projects that contribute to private sector development, such as those supporting small and medium-sized enterprises through financial intermediaries.

With a portfolio of US$13.1 billion in asset management and 385 clients in 25 countries, IDB Invest provides financial solutions and advisory services that meet the needs of its clients in a variety of industries.

IDB Country Represen-tative Sophie Makonnen congratulated the team which she noted was critical in negotiating the agreement.

“Our aim and ambition in Guyana as in all our member countries is to change the lives of the people for the better through financial and technical support,” she explained, while adding that areas of investment are geared toward poverty reduction.

The IDB, she noted, has invested in health, education, and infrastructure and has sought to be relevant and responsive to the needs of member countries since its first loan in 1977.

“A strong and healthy private sector is the engine of growth for a country as it generates investment and creates employment,” she said, adding that since 2008 the IDB Invest arm has started to play a more critical role in supporting private sector growth.

Makonnen reminded that a similar successful line of credit was provided to DBL in 2008.

According to the IDB Invest website, the multilateral bank loaned the local bank US$2 million also to promote capital asset and working capital financing for micro, small and medium size enterprises.

Counselor for Guyana at the IDB Sheranne Isaacs, who was acknowledged as critical to the finalization of the agreement, express-ed gratitude to the IDB Invest team on behalf of the Guyana Government.

She stressed that the ability of IDB Invest to adjust, innovate, motivate and create has made it the region’s partner of choice in private sector development.

Isaacs specifically thanked the IDB for honouring its pledge made as part of the Busan Mandate to grant small island countries equitable access to IDB Invest resources.

“Small states like Guy-ana need access to these resources, technical assistance and capacity building to catapult development. We are pleased to partner with you and are sure that DBL will use these resources to improve its already remarkable service to the people of Guyana,” she concluded.  

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