Govt explores Junior Stock Exchange

…as State commits to incentivise setting up bank accounts

As the Guyana Government continues to work on modernising and expanding the country’s financial sector, considerations are being given to the establishment of a junior stock exchange that will open up financing opportunities for Small and Medium-sized Enterprises (SMEs).

This was revealed by President Dr Irfaan Ali on Thursday at a breakfast forum hosted by the Georgetown Chamber of Commerce and Industry (GCCI) on “Energy Insights”.
“As part of the financial sector modernisation, we’ll enhance the [local] stock exchange and [are] looking at the possibility of a junior stock exchange,” the Head of State noted.
A junior stock exchange is a type of stock exchange where small and growing companies can raise capital by offering shares to the public.
In the past, the GCCI Chamber had previously called for an overhaul of the Guyana Stock Exchange (GSE), which only has about 15 local companies with publicly listed shares.
A January 2024 statement from the Chamber had highlighted the negatives of current GSE operations and its effect on the business community. With access to financing being a leading hurdle for many businesses in Guyana, the GCCI had noted that the GSE has a significant role to play in facilitating a transparent and efficient marketplace for companies to raise capital, invest, and grow.
According to the Chamber, the lack of necessary infrastructure, technological advancements, and regulatory framework at the GSE compromise the financial health of businesses, restrict their ability to attract investment, and ultimately hamper their growth potential.
Months later, in October 2024, the GCCI announced that it is collaborating with the Jamaica Stock Exchange on the development of a junior stock market in Guyana.
“SMEs need to have access to capital, so we are moving forward with that. The Chamber is excited about it; we need to expose our members to these opportunities. Jamaica Stock Exchange as a model that works,” then GCCI President Kester Hutson had stated at the time.

Companies have to go public
Meanwhile, Vice President Dr Bharrat Jagdeo on Thursday, expounding on the Government’s plans to set up a Junior Stock Exchange, reminded that while the Government appoints the Guyana Securities Council – the regulatory body – and sets the regulatory framework like the Securities Exchange Act, the stock exchange mechanism in Guyana is privately owned.
Jagdeo further pointed out that the challenge with the local stock exchange market is the lack of interest by private companies to go public and be listed on the exchange.
“Many of them do not want to list on the exchange. So, the only way we could get an exchange that is very vibrant is if you get more companies to go public and to then pay a fee to get listed on the exchange,” he noted.
VP Jagdeo explained that while the Government can put the regulatory systems in place, for this to work depends on the willingness of the business community to utilise the exchange.
“A lot of the private companies in Guyana don’t want to use the exchange because going public means they have to publish every few months their records…their audited statements and all of that, and then some people don’t want that type of scrutiny. So, I think when the President spoke of this, he was hoping that the private sector would also make full use of the opportunity.”
“We are prepared to address any regulatory matter that would enable this to happen. We are prepared to create the incentive for this to happen, but then it’s up to the private sector to make use of it, and a lot of them lament that they can’t get loans or that they’re stretched to the limit, but this is one way of raising capital outside of going to the formal banking system. You can raise capital either through a loan or by getting equity, like trading shares in the company,” Jagdeo stated.
Another option the Vice President touted is having some Government instruments traded on the exchange. In fact, the Government has already indicated that they may want to syphon off, from the burgeoning oil and gas sector, some of the most lucrative opportunities, then underwrite a return for the investors in those companies, create the share structure of the companies, and maybe list those on the exchange.
Jagdeo said this model could be used for the fertiliser plant that the Government plans to build in Phase Two of the Gas-to-Energy (GtE) project at Wales, West Bank Demerara.
“We can create a share structure and allow Guyanese to buy shares in that company, maybe limit it to, say, 100 shares per person, because you want to have more people own shares – teachers, fishermen, nurses, everybody can own shares. You guarantee a 10 per cent return on those shares…the Government can underwrite it and then have those shares listed on the exchange,” he stated.

Incentivising opening up of bank accounts
Nevertheless, during the GCCI event on Thursday, President Ali outlined plans to modernise the local financial sector – something which a team comprising Cabinet members and other stakeholders is working on.
“In three weeks that report will come to us as to how we modernise our banking sector, the creation of a modern stock exchange and options for capital mobilisation. Many people are speaking about diaspora bonds and all of this – all of these options will be examined,” the Head of State noted.
He went on to outline that as part of modernising the financial sector, his Government is ready to step up and ensure that every Guyanese has a bank account.
“We have to be able, in the shortest timeframe, to ensure every Guyanese has a bank account even if the Government must incentivise the opening up of those bank accounts. So, a modern economy that is powered by a modern financial sector, one in which efficiency, reliability and results drive our governance,” Dr Ali stated.
Only earlier this week, the Guyanese leader announced a slew of measures aimed at strengthening and stabilising Guyana’s financial system, with a specific focus on financial and banking services and the foreign currency market.