US$100M Guyana Development Bank will spark new wave of entrepreneurs – economist

The planned establishment of a Guyana Development Bank, backed by an initial US$100 million seed fund, could mark a major shift in how Micro, Small, and Medium-Sized Enterprises (MSMEs) access financing in Guyana, according to Guyanese economist Richard Rambarran, who has described the initiative as one of the more significant financial sector measures announced under Budget 2026.
Speaking during a recent discussion on contemporary development issues emerging from the first quarter of 2026, Rambarran said the proposed institution has the potential to address longstanding barriers faced by small businesses, many of which have historically struggled to secure credit from traditional commercial banks.
Among the features highlighted by Rambarran are the Government-announced financing options of up to $3 million at zero interest and with no collateral requirements, as well as additional support for ventures requiring larger sums.
He said such a move represents an important intervention in a financial landscape where smaller businesses often find themselves excluded or disadvantaged when seeking capital to start or expand operations.
“That represents an extremely important point within the context of Guyana,” he said, noting that many entrepreneurs have long faced either high borrowing costs or outright difficulty in accessing loans.
“We’re now seeing that MSMEs, who historically have had to pay higher interest rates when being given products or, in a general sense, been unable to access credit from any of the institutions, are now being placed at the forefront,” he added.
Rambarran said the Guyana Development Bank would not only provide easier access to financing but could also help create a more enabling environment for entrepreneurship and private sector development.

New wave of entrepreneurs
He described the initiative as one capable of bringing “an entirely new wave of entrepreneurs” into the economic system by removing some of the obstacles that have traditionally prevented smaller operators from accessing formal financing.
“This really catalyses, once again. I use the word ‘catalyse’ because it truly is the fundamental of the economic growth story we’re seeing here. This represents an entirely new wave of entrepreneurs that can be roped into the entrepreneurial system,” he said.
In addition to smaller loans, Rambarran said Budget 2026 also outlined another layer of financing support for businesses seeking more substantial backing.
“A further announcement was made on the front of the Guyana Development Bank that if you want to move to $7 million in financing, the Government will co-invest with you and help to bear some of that financial risk for the venture,” he said.
According to him, this type of shared-risk arrangement could be especially useful for new or growing businesses operating in areas the Government considers important to national development.
“Now what we see here is a product where you are not the sole risk-taker, and if your business or your enterprise falls within the ambit of what the Government is prioritising to be able to catalyse growth, then you are going to receive this extra funding,” Rambarran stated.

Commercial banks have no risky lending.
In examining the issue of access to finance, Rambarran argued that the conversation in Guyana has for too long focused almost exclusively on commercial banks, even though such institutions are not structurally designed to take on large volumes of high-risk lending.
He said this is one of the reasons why many small and emerging businesses often struggle to secure the support they need.
“If we think about the discussion on access to finance, historically, we have really placed a lot of emphasis on commercial banks, and they have been in the spotlight,” he said.
But, he cautioned, commercial banks operate under a different model and must be careful about where they place depositors’ funds.
“By structure and by definition, a commercial bank does not necessarily lend itself towards risky lending, because a commercial bank at the end of the day is an intermediary of funds,” he explained.
Rambarran added that it would be dangerous for banks to heavily expose their portfolios to risky ventures, since that could undermine financial stability.
“You won’t want that a commercial bank goes and lends 60 to 70 per cent of its portfolio into a very risky venture or into a number of risky ventures, because that is actually the crux of a collapse or a financial crisis through a bank run when people realise that the commercial banks are lending their monies out in that way,” he said.

Fill a market gap
Within that context, he said, the Guyana Development Bank is intended to help fill a market gap that has persisted for years, especially in relation to the MSME sector.
While acknowledging that some commercial institutions have introduced products aimed at supporting entrepreneurs, Rambarran said the broader financial architecture in Guyana still requires strengthening if small businesses are to play a larger role in national growth.
He pointed to existing efforts by private financial institutions but maintained that these have not been enough on their own.
“We do see some institutions trying, for example, GBTI launching GBTI Grow, and so on. We do see institutions trying, but more is really needed to help to kickstart the MSME sector in building an internationally competitive private sector,” he said.
The economist said the planned development bank should therefore be viewed not as an isolated policy announcement but as part of a wider attempt to deepen Guyana’s financial sector and make the economy more supportive of entrepreneurship, innovation, and business expansion.
He said the Guyana Development Bank announcement should be considered alongside plans to reform the capital markets and establish a junior stock market, which he also described as important for deepening the financial system.
“Access to finance will really change as a result of this institution,” he said, adding that Government involvement in such a mechanism often becomes necessary where market gaps or failures have prevented sectors from growing to their full potential.
He said the initiative reflects an effort to ensure that development is not confined to larger players but is also extended to smaller enterprises that often have ideas, products, or services but not the financing needed to scale up.
In that regard, he said the institution could become one of the more transformative business measures announced in Budget 2026.