The Inter-American Invest-ment Corporation yesterday approved a US$2M ($400M) loan to Demerara Bank Limited to launch a programme that will provide Guyanese companies with medium and long term financing in US dollars.
According to a press release from the IIC through the Inter-American Develop-ment Bank’s (IDB) George-town office, with the loan, the IIC will provide Demerara Bank Limited with its first long term foreign currency loan from a multilateral organisation.
“This transaction is expected to have a significant demonstration effect and help the bank start to diversify their sources of funding. It will also be the IIC’s first loan to a financial intermediary in Guyana,” the press release said. CEO of Demerara Bank Limited Pravinchandra Dave was out of the country when this newspaper sought a comment from him yesterday on the programme.
Rodrigo Navas, IIC’s Investment Officer, stated: “In the current world and regional economic environment, im-proving access to suitable credit to SME is essential. This is especially important to Guyana, where long term foreign currency financing for SMEs is not available.” He said that for the financial intermediation to benefit private sector development, financial institutions first need access to longer term sources of funding.
According to the press release, at least ten SMEs will benefit from this operation over the life of the loan. The IIC is a multilateral institution that is a member of the IDB Group. It provides financing in the form of equity investments, loans, guarantees and other instruments and advisory services to private enterprises in Latin America and the Caribbean. The IIC’s mission is to promote the economic development of its regional member countries by encouraging the establishment, expansion and modernisation of private enterprises, particularly those that are small and medium in size.
