-RDC and Municipality
The Regional Democratic Council of Region Ten and the Mayor and Town Council of Linden have both expressed concern at what they call the “continuing freeze” on loans from the EU-funded Linden Economic Advancement Fund (LEAF), which is having a ripple effect in employment and other sectors.
In a statement on March 27, they said that according to their information this came about because the agency’s credit committee has not met to authorize loan applications for the first quarter of this year.
Stabroek News had reported on March 23rd that Lindeners were awaiting news on the proposed extension of the project which is due to end in June. Although LEAP is slated to end on June 30, without an extension LEAP components like LEAF could not give loans beyond March 31.
Of particular interest to the municipality and the RDC as major stakeholders on the LEAP Advisory Board was the fact that the disbursement of loans was scheduled to totally conclude on Tuesday, barring an extension of the LEAF programme which they have been proposing for over one year now to no avail. Neither the EU nor the government has commented publicly on the extension proposal.
The also noted that several businesses have reported that their applications for a second loan after the successful repayment of their initial loans have been put on hold and their businesses are now suffering tremendously as a result.
The widespread negative impact of this freeze on development funding for the economic and productive sectors of the community has been enormous, the RDC and municipality declared, adding that this is being exacerbated by the hardships flowing from the global financial crisis.
“It is therefore very strange that the over $30M worth of funding available for disbursement to assure the buoyancy of businesses in Region Ten and Linden would be held up for the want of a meeting to authorize it,” the RDC and the municipality said.
The RDC and the municipality noted that the LEAF component of the Linden Economic Advancement Pro-gramme is seen as a major success story of this effort and this fund has amassed an impressive portfolio and record of repayment by borrowers in its initial stages.
However, they contended, this record has suffered with the withholding of funding by this agency which brought a halt in the disbursement in loans from October of 2005 until March 2008 as a result of questions about the company managing the funds. Astute management and innovative measures ensured that the repayment of these loans crept back up since the continuation of disbursements in 2008, the release stated, but all of these gains stand to be undone by this latest freeze on the grant of loans from this agency.
The joint press release also noted that in this instance there are funds available for the grant of loans with an additional sum of over $50M still to be released, which is part of the third tranche of funds for this programme, most of which has already been disbursed.
According to the RDC and the municipality, the hugely negative impact of this situation cannot be over-emphasised and it has a ripple effect in the employment and other sectors which could be greatly mitigated by the continuation of the revolving fund that LEAF currently provides as a development bank for Region Ten.
The municipality and the RDC had earlier urged the Linden Economic Advance-ment Fund’s Credit Com-mittee to meet with dispatch before the deadline in order to authorise disbursement of the available $30+M.
