Over $28B in banking relief provided to businesses – BoG

…relief measures make up 10.8% of total loans in Guyana

The COVID-19 pandemic continues to impact Guyana’s financial sector. As of the end of March 2021, over $28 Billion in Banking relief to businesses in various sectors has been provided, helping to cushion them from the fallout of the pandemic.
According to the Bank of Guyana’s first quarter report, businesses benefitted from a total of $28.8 Billion in banking relief measures as of March 2021, as part of COVID relief. According to the bank in the report, these reliefs were implemented in collaboration with the Guyana Association of Bankers Incorporated.
“The COVID-19 pandemic continues to pose a serious financial stability threat to the banking sector. In this regard, the Bank of Guyana is committed to safeguarding and strengthening the resilience of the local financial sector,” the BoG said in its report, adding that in collaboration with the Guyana Association of Bankers Incorporated, the Bank designed and implemented (these) measures to alleviate hardship caused by the global outbreak.

The report notes that the amount of relief provided represents 10.8 per cent of total loans. This is compared to 5.5 per cent of total loans last year end. The report also includes a breakdown of the relief measures by sector. The largest beneficiary of reliefs was the services sector, with 57.4 per cent.
The manufacturing sector benefitted from 10.8 per cent of the relief measures, followed by mining and quarrying with 5.2 per cent and agriculture with 4.8 per cent. About 18.9 per cent or $5.4 Billion in relief was granted to the real estate mortgage sector. All banks contributed to this sector, with one bank in particular providing $2 Billion of relief.
The value of household fiscal relief was much lower, amounting to just 2.9 per cent of total relief granted. However, the number of households who sought relief measures far exceeded the other sectors. Some 814 household facilities out of a total of 1,608 facilities received banking relief.
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.