IDB quarterly report: Guyanese benefit from US$69M in COVID-19 banking relief through Govt policies

The Inter-American Development Bank (IDB) has revealed that persons with loans that were at risk of being defaulted due to the COVID-19 pandemic, have benefitted from a whopping US$69 million through polices implemented by the Government of Guyana.

In the IDB’s quarterly report, it explained that one of the main policy tools from the Bank of Guyana was extending debt payment schedules and reducing interest rates. This relief period allowed beneficiaries to avoid having their loans classified as non-performing.
“Commercial banks agreed to provide short-term loans at concessional rates between 5-6 per cent, lower than the prime lending rate of 10.3 per cent. Commercial banks agreed to offer general concessional reductions of interest rates of 1 per cent and up to 2 per cent on consumer loans below G$10 million (US$48,000),” IDB said.
“The total loan portfolio of deposit-taking institutions was approximately US$1.5 billion in December 2020. Of that total, approximately US$69 million benefitted from relief measures, accounting for 4.6 per cent of total loans,” the institution further explained.
Meanwhile, the IDB noted that new COVID cases increased significantly towards the end of the first half of 2021 in Guyana. This is a trend similar to that observed in other Caribbean countries, as well as the region at large. The IDB further noted that the average number of daily new cases per month increased from 42 in January to 118 in May and declined to 80 in July.
“Similarly, the total number of deaths per month increased from 12 in January to 93 in May, declining to 72 in July. In relative terms, the seven-day rolling average of new cases per day peaked on May 28, with 80 cases per million population before declining to 50 on August 10, below the peaks of Trinidad and Tobago, Suriname, and The Bahamas,” the IDB said.
“Currently, only Barbados has fewer daily new cases than Guyana. As of early July, Guyana had procured approximately 566,000 vaccine doses, of which 1.1 per cent was from the COVAX facility. Authorities have announced plans to procure 688,000 additional doses, which would cover the country ’s entire adult population of approximately 600,000.”
The IDB also touched on the Government’s measures for reducing the spread of COVID, including requiring persons entering Government buildings to show proof of vaccination. Public transport operators, domestic and international, also have to show proof of vaccination.
“This measure has affected both private and public sector workers, such that the Ministry of Health announced on August 12 that health and public transportation on workers would be given a two-week extension to comply with the vaccination requirement. Regarding international travel, effective August 8, all incoming adult travellers must show proof of vaccination of at least one dose along with a negative PCR test,” the IDB noted.
Back in August of last year, President Dr Irfaan Ali had announced a series of measures agreed with the local banking sector to ease the burden on citizens. These include lowered interest rates and an extension of the moratorium on loan payments.
This meant that customers with mortgages and other loans would be spared the financial burden of servicing those loans during the pandemic. In addition, their loans would not be classified as non-performing, ensuring that they do not default.
“Commercial banks agreed to offer general concessional reductions of interest rates of one per cent and up to two per cent on customer loans below $10 million until December 30, 2020. The existing lending rate ranges between 6.5 per cent and 16 per cent. Some commercial banks have agreed to apply special treatment to the interest accrued during the moratorium period,” the President had explained.
“Commercial banks have agreed to waive all bank charges, including ATM and Merchant Bank charges, to encourage more out-of-bank transactions as well as…transactions by senior citizens,” he had noted, adding that these measures will not impact the soundness of the banking sector.
The Head of State had also announced that the Bank of Guyana would relax certain requirements that would allow banks to cushion their losses and increase liquidity by $9.4 billion. In December of last year, all of these COVID-19 relief measures were extended until June 2021.