Govt to relaunch Agri and  Industrial Bank

Prime Minister Moses Nagamootoo engages in discussion with a young entrepreneur during his tour of the JR Building Supplies booth at the Berbice Expo (GINA photo)

…to intermediate funds for economic expansion

In pointing that Government must play a key role in ensuring that local investors enjoy favourable benefits and concessions and there was “ample opportunity” for investment in both agriculture and aquaculture, Prime Minister Moses Nagamootoo announced the reestablishment of an Agricultural and Industrial Development Bank. With Guyana having a comparative advantage over many countries in agriculture, funding has proven to be a major constraint in the sector not moving towards diversification and vertical integration.

The Prime Minister was at the time making the feature address at the opening of the Berbice Expo on Friday at the Albion Community Centre Ground, Corentyne, Berbice.

The Prime Minister highlighted the bounty of nature that Guyana was blessed with, saying that he was proud that Berbice in particular produced some of the finest agricultural produce. He noted that Guyana had a high rate of unemployment and the Development Bank would provide seed capital and financing to the Agricultural Sector, which would boost entrepreneurship.

“Our Government recognises that entrepreneurship is necessary in getting young people into small businesses as self-employers and as creators of wealth. We recognise also that Government must play a key role in ensuring that local investors enjoy the same benefits and concessions as foreign investors,” the Prime Minister stated.

He said Government hoped that the Berbice Expo would “inspire new entrepreneurs to come forward and occupy the space for more investment”, as he reaffirmed its commitment to the development of micro enterprises in Guyana which are critical to strengthening and sustaining the country’s economy, the Government Information Agency (GINA) reported.

The Prime Minister acknowledged that serious challenges were being experienced in the traditional export sectors – rice, sugar and gold, with the loss of the Venezuelan market and low paddy prices, continued problems in the sugar industry and the plummeting world gold price.

Nagamootoo told the gathering at the Berbice Expo, “…the answer lies in diversification…You have signalled that we must not depend only on rice and sugar to create or maintain employment. We need to get into other types of business to create wealth, to promote jobs and offer a better life in our various communities.”

The announcement of an Agri Bank was applauded by the hilt to the Private Sector Commission (PSC), who was present at the Berbice Expo. While the Private Sector banks have been very forthcoming in supporting the Agricultural Sector, the risks involved have evidently proved to be too great for a more expansive lending policy that could be undertaken by a development bank. Such institutions normally charge lower interest rates than the commercial banks.

While this initiative is much welcomed by the Private Sector, it is not a new idea, the Guyana Agricultural and Industrial Development Bank (GAIBANK) was established many years ago, but was closed down over a decade ago. One of the problems was in collecting outstanding debt that was extended. In the present climate of higher liquidity in the banking community, however, the Agri Bank would be able to intermediate funds to the sector in a more focused manner because of its specialisation.

It should be noted that proper management will be crucial in order for this bank to survive especially now, given the state of the economy and the plight which those in the agricultural sector was currently facing.

For a number of years, the privately-owned Guyana Bank for Trade and Industry (GBTI) has been in the forefront of providing loans to rice farmers and other persons involved in agriculture.