Pres Ali challenges banking sector to be bolder, create more innovative lending policies

– says financing must evolve to be more responsive to country’s needs

The banking sector was on Friday given a cold dose of reality during President Dr Irfaan Ali’s address at the Guyana Oil and Gas Energy Chamber’s Annual Awards and Induction Ceremonial Dinner where he urged them to be bolder and more innovative when approving financing.
The President made these remarks while referencing the explosion of growth related to the oil and gas sector, in even the non-oil corners of the economy. An important ingredient of private sector growth is access to finance and according to President Ali, newcomers have it particularly hard.
“Let us not be naive, let us be practical. We live in a world today where we have to continuously present the case that newcomers in this sector are treated fairly. Already the cost of financing is very high. If you get financing, that is,” the President said.
The President also had a direct message for the Chief Executive Officers (CEOs) and decision-makers of the banking world, urging them to be more vibrant and innovative in approving financing for businesses that approach them.
“We have to bring our insurance companies and brokers together. And find an innovative way in which we can carve out opportunities for the financial sector. We have to get our CEOs in the banking sector to be more innovative. More vibrant. And create the opportunities for the local private sector.”
“Not to be deal blockers. They have to be responsive to the needs of the country. They have to understand where the country is headed. Most major companies globally do two things. There’s a specialist in governance, analysing policies. And there’s a budget on research and development.”
He further referenced the importance of companies changing the way they think and moving away from the insularity of the traditional business world to one that embraces partnership. Additionally, he urged them to put more emphasis on research and development.
“Most of the successful companies are those that invest in research and development. Our culture is that we look at research and development as an expense, not an opportunity. We have to change these things,” President Ali said.
“The other opportunities we are talking about that are directly linked to the oil and gas sector, if we’re going to position ourselves in leadership positions on food production, its fertiliser, chemicals, technology, all of this is important in positioning Guyana in the lead position on food security. But they’re directly linked to oil and gas.”
The private sector has been vocal about the need for access to finance to be addressed, at one point calling out continued bureaucracy at commercial banks hindering access to financing. In a statement earlier this year, the Georgetown Chamber of Commerce and Industry (GCCI) said that this situation was putting local businesses at risk of becoming unable to compete in Guyana’s oil and gas sector, as well as losing out in Government projects.
According to the chamber in its statement, local banks must be proactive and outline the hindrances – whether legislative, economic, social, or environmental – that are restricting better access to finance for the local private sector.
It was pointed out that despite charges from the highest level of Government, including President Ali and Senior Finance Minister Dr Ashni Singh, coupled with concerns from the private sector, the banks have not been forthcoming with the information that could mitigate the challenges facing access to finance for local businesses.
This had led the private sector to come to the conclusion that the issues affecting easy access to finance may be caused by the banking sector itself, hence the calls for the hindrances to be clearly stated.
There have been some signs of improvement, however. Kester Hutson, who was elected to the position of GCCI President this year, had said during a press conference that access to finance is growing along with development in various sectors. These are all developments that he had urged businesses to capitalise on. (G-3)