Loggers to access financing with establishment of $900M Revolving Fund

…as MoU signed with Demerara Bank for easy access to loans

The Guyana Government and Demerara Bank has inked its collaborative efforts to activate a $900 million revolving fund for increased production in the forestry sector, with the signing of a Memorandum of Understanding (MoU) on Thursday.
With this funding, Government and the Guyana Forestry Commission would be able to assist in the enhancement and expansion of small and medium-scale loggers; and meet the growing demands.
From the arrangement, Demerara Bank will contribute $600 million while Government will put the remaining $300 million from its coffers. Through a four per cent interest rate, stakeholders will be prequalified based on recommendations from the Commission, followed by a mechanism for them to access financing for greater production.

Finance Minister Dr Ashni Singh and Natural Resources Minister Vickram Bharrat with officials from Demerara Bank Limited and GFC post-signing of the MoU

Senior Minister with Responsibility for Finance, Dr Ashni Singh said at the signing ceremony that this funding will be deployed for affordable lending and ensure that the Guyanese economy is not dependent on one sector.
“This MoU to be viewed against the backdrop of a very explicit and emphatic commitment on the part of President Ali’s government to ensure first of all, resilience of the Guyanese economy, and in particular resilience through ensuring a diversified economy.”
“Naturally, given the exciting developments that are unfolding in the oil and gas sector, oil and gas will be driving a lot of the exciting economic growth that we’re seeing in Guyana…notwithstanding the incredible, exciting developments that are happening in oil and gas, we feel very strongly about ensuring a vibrant, competitive, dynamic, and rapidly growing non-oil economy,” the minister expressed.
These sectors include mining, forestry, agriculture, tourism among others. Moreover, Dr Singh said partnering with the financing and non-financial private sector bodies epitomizes Government’s drive to ensure development for the entire country.

Enhanced production
Natural Resources Minister Vickram Bharrat shared that this is in keeping with Government’s commitment to working with the non-oil sectors. Upon entering office in 2020, he reminded that access to financing was a major concern for stakeholders as well as concessions; as the Guyana Forestry Commission was battling to stay afloat amid bankruptcy.
“To date, the Guyana Forestry Commission would have allocated over 100 concessions to small loggers – local Guyanese loggers. And today, we are addressing the second issue which is financing for small loggers especially. So it is indeed pleasing for me as Minister of natural resources that we have reached this stage where we can bargain with the intervention of President Ali,” the Minister expressed.
Bharrat was keen to note that exponential growth in construction, coupled with a booming housing initiative will see the need for enhanced production – one of the advantages of this partnership.
“We know the significant development that is taking place across the country has increased the demand tremendously. So, the forestry sector with this initiative would be able to meet that demand. Also, we know that the initiative of the housing project between Barbados and St Vincent, that is something that stakeholders are working in collaboration with also.”

Diversifying credit
General Manager of Demerara Bank Limited, Dowlat Parbhu expressed that Guyana gains confidence from both the public and private sector for support to indigenous sectors. Additionally, it is a way of diversifying credit.
“It is quite important for us to see as an institution to ensure that credit is well diversified, more particularly to the developmental sectors of Guyana. I think today Guyana sees the commitment of the Government and private sector to ensure that those indigenous sectors are not left behind. Demerara Bank has always been a champion to ensure that credit is well-diversified,” the General Manager relayed.
Through a partnership with the Guyana Forestry Commission under the Natural Resources Ministry, a committee will be established to ensure that persons are adhering to and abiding by what is expected of them, that is, the sector itself and its various associations.
In 2020 alone, the Ali-led Administration injected $350 million into the then cash-strapped Guyana Forestry Commission to cover operational costs and wages for staff for the remainder of the year.
Strategies aimed at boosting the financial performance and management capabilities of the GFC were undertaken and in in 2021, the forestry sector was able to make a positive turnover and manage on its own.
One achievement of the sector in 2021 included getting stakeholders, particularly small-scale loggers back into the business which resulted in the construction boom, and an increase in log production, with over 400,000 cubic feet declared.