Guyana signs US$5M financing agreement under GRIF - for Small and Medium Enterprises development
Guyana continues to benefit from the roll out of financial remuneration under the Guyana Redd+ Investment Fund (GRIF) for providing environmental services to the world.
Today, an agreement was signed for the disbursement of funds from the GRIF to finance the execution of a third project in Guyana- the development of small and micro enterprises with the Inter-American Development Bank (IDB) as its partner entity.
Minister of Finance Dr. Ashni Singh in the Boardroom of the Ministry of Finance, Main Street signed the non- reimbursable agreement with Resident Representative, IDB Sophia Makonnen, for funding to the tune of US$5M to be made available from the GRIF to address the two major constraints to the development of Micro and Small Enterprise Development and building alternative livelihoods for vulnerable groups; that is limited access to financing and limited technical and business skills.
Minister of Finance Dr. Ashni Singh and Resident
Representative, Inter-American Development Bank
(IDB) Sophia Makonnen shake hands following the
signing of the non-reimbursable financing
agreement to the tune of US$500M for the
execution of the Micro and Small Enterprise
Development and building alternative
livelihoods for vulnerable groups project
Minister Singh during his address recognised the importance of having this, the third project signed. “The fact that this project is funded under the GRIF, and in particular the fact that the IDB today is playing the role of partner entity under the GRIF institutional mechanism, is significant because we have worked very hard with all of the partners involved in this process to design an administrative mechanism that would see the funds intermediate in an efficient way and would see the funds delivered ultimately to the intended beneficiaries. We are happy therefore to see GRIF projects materialise,” he said.
The other projects that have been signed for execution under GRIF funding are an institutional strengthening project for the Rupununi, in which the IDB is also the partner entity with Guyana. The other is the Amerindian Development Fund in partnership with the United Nations Development Programme (UNDP).
This third signing is continued validation that the Government of Guyana’s partnership with the Government and people of Norway to provide global environment service, Minister Singh noted as well. He said that the partnership in its own right was pioneering in so many ways and that, “projects like this, funded by the investment fund that was established under this partnership with Norway, projects like these are important from that standpoint, they represent the manifestation of this partnership in project implementation.”
There is also the other position from which the project addresses the development of small and micro enterprises, an area that Government has been seeking to address.
He said that Government has recognised for a long time the extremely important role that small and medium enterprises can play, and have played in transforming the economic landscape of the country, particularly of communities, families and individuals, and so over the years have been encouraging small business development from a number of fronts and through various avenues.
“This really represents our latest effort as it relates to promoting small businesses,” he said.
The project will address the constraint of lack of access to financing by establishing among others a credit guarantee fund, an interest support facility and a Low Carbon Development Strategy (LCDS) grant scheme, Minister Singh said. He mentioned that all of the afore-mentioned schemes will be executed through partnerships inclusive of the private sector and financial institutions.
Lack of skills will be addressed through a training voucher scheme, he said, and this will also encompass guidance on how to access financing, and in particular for projects that are consistent and in line with LCDS.
He noted that the project represents a single element of what is much broader, Government’s strategy for promoting small business development, and mentioned other initiatives like the set up of operation by year-end of a Credit Bureau to provide easier and more affordable access to financing for SMEs.
The Micro and Small Enterprise Development and building alternative livelihoods for vulnerable groups initiative was approved by the IDB on February 7.
Makonnen stated that the goal of the project is to support the reorientation of the economy into a low carbon cap as envisioned in the LCDs and to create incentives for small businesses to invest in LCDS. She listed upscaling in SMEs productive activities, more SMEs gravitating towards the low carbon sector and less carbon emission from the project.
The “Micro and Small Enterprise Development and building alternative livelihoods for vulnerable groups” will be implemented by the Ministry of Tourism, Industry and Commerce under the aegis of the Small Business Bureau.