– says new GM
Caricom Insurance, the former manager of the Linden Economic Advancement Fund (LEAF) plans to continue a loan programme in Linden under a new manager, and is seeking to recover millions in outstanding loans.
LEAF, a joint government of Guyana and European Commission loan programme ended in June 2009 and was a component of the over $2.2 billion Linden Economic Advancement Programme (LEAP) that ended December last year.
New General Manager, Linden businessman Leonard Forde, who replaced former LEAF Manager Valarie Sharpe told this newspaper that “a massive loan recovery drive” had started.
Forde was appointed on January 11. He is the past president of the Linden Chamber of Commerce, Industry and Development (LCICD) and Secretary/ Treasurer of the National Association of Regional Chambers of Commerce.
Describing aspects of the loan recovery programme, Forde said defaulters will be invited into the Republic Avenue office for discussions.
“We have to recoup that money,” he said, but the option of going to court will not be pursued at the moment. There are also plans to help defaulters to reorganize to continue payments or to continue with their projects. An assessment of the defaulters will also be done, to see whether or not the monies were used for purposes stated when the loan applications were made.
Around 80 or more persons are in default and Stabroek News understands that the outstanding sums amount to millions of dollars. Caricom Insurance had issued over $700 million in loans from January 2005 to 2008; no new loans were issued last year.
It was noted that some defaulters are still in business but have just stopped repaying their loans, because they believe the programme has ended. Some have not paid on their loans since receiving those loans in 2008 and during that period of non-payment interest continued to accrue.
The general manager explained that some level of consideration, as regards interest may be given, but persons who receive this consideration may not be eligible for future loans.
Forde is no stranger to loan recovery programmes since he is also a member of the team seeking to recover sums owed to the Guyana National Cooperative Bank. This bank was taken over by Republic Bank years ago but creditors are still being pursued for defaulting loans.
Return of principal
Forde reiterated that since Caricom Insurance had managed the monies under contract, the principal sum it received under LEAF must be returned. A sum of $465 million was given to LEAF, for the disbursal of loans to Region Ten residents.
During the third quarter of last year Caricom Insurance paid $50 million on the principal and was expected to pay another $50 million by the end of last year.
The new manager explain-ed that Caricom Insurance plans to continue the loan programme and to concentrate on micro and small loans ranging from sums of up to $200,000 and from $200,000 to $500,000.
For now Forde is mainly getting himself up-to-speed while some plans are still to come on stream. It was also pointed out that meetings are continuing within Caricom Insurance on the way forward in the loan programme.
Forde stated that by the end of the first quarter or by April, the new loan programme may be ready to be implemented, but he could not give a definite time frame.
Forde will be responsible for the credit arm, the insurance and loan recovery programme at Caricom Insurance.
New entity
The new entity that replaces LEAP, the Linden Enterprise Network (LEN), a government/private partnership, is expected to oversee a credit facility, similar to LEAF, but this entity is not yet duly constituted with a fully functioning board.
It is not clear when a full board will be appointed. LEN opened its offices this month in the Region Ten Business Centre on Republic Avenue. So far, Lindener Andrew Forsythe and Tarachand Balgobin, Head of the Project Cycle Management Division (PCMD) at the Ministry of Finance, have been tapped to be on the LEN board.