Home Top Stories Guyana’s financial sector: Policies allowing private sector to capitalise on new business...
…says growth of credit to private sector returning to pre-pandemic levels
The Inter-American Development Bank (IDB) has highlighted Guyana’s progress in implementing its National Payments System Strategy, which is important to the growth of the financial sector.
According to the bank in its most recent report “Caribbean Economics, Finance for Firms”, Guyana’s financial sector is likely to benefit during the economic boom, from the policies being implemented to allow the private sector to capitalise on new business opportunities.
“Growth of credit to the private sector was increasing significantly before the pandemic struck and is currently growing at close to pre-pandemic levels. Supporting financial deepening could go a long way towards facilitating more investment and employment, thus increasing household incomes,” the IDB said.
IDB also noted that one policy development is the Government’s plans to issue longer term bonds, in addition to treasury bills. In the report the IDB noted that dedicated long term public debt instruments can help diversify financial sector investments. The bank also lauded the Bank of Guyana’s implementation of the National Payments System Strategy.
“This could support financial depth and increase competitiveness in the sector. Finally, the role of technology and digitalisation has been a significant factor impacting financial sector development and improving financial inclusion.”
“In this regard, the Bank of Guyana has made progress implementing the National Payments System Strategy, which identified the challenge of developing the necessary infrastructure to integrate payment services across providers,” the IDB said in its report.
They also noted that the Bank of Guyana has completed implementation of the Guyana Real Time Gross Settlement System (G-RTGS) and Guyana Central Securities Depository (G-CSD) in 2021, which are payment systems that support the phasing out of cash payments.
“To further expand digitalisation, supporting the interoperability of cards across banks and point-of sale terminals could further improve efficiencies and reduce cash-based payments,” the IDB said.
A National Payment System (NPS) is a system that provides the economy with information and communications technology (ICT) options for processing payments resulting from the many different types of economic transactions that take place daily. In other words, this includes e-payments, credit cards, and wire transfers.
In the past, Guyana’s National Payments System was predominantly paper-based, with a cash-oriented culture driving most transactions. The Bank of Guyana (BoG) was tasked with leading the development and implementing a strategic approach to advancing the development of Guyana’s NPS by establishing the parameters to guide policy and set priorities.
Already, most of the major supermarkets allow customers to use ICT options when making payments, such as a customer using their debit card to conduct Point of Sale (POS) transactions. This is the case in several stores. The majority of stores, however, do not have this feature, considered a norm in developed countries.
The Bank of Guyana begun the development of a modern, electronic payment infrastructure in 2017 with the US$6 million loan from the World Bank. The introduction of these new services was facilitated through the National Payment System (NPS) Act, which was passed in the National Assembly back in 2018.
The Act describes electronic money as something representing cash that is “stored electronically, including magnetically or in any other tangible or intangible device such as a SIM card or a software; issued on receipt of funds of an amount not less in value than the monetary value issued for the purpose of making payment transactions; and accepted as a means of payment by persons other than the issuer.” (G3)
