The Guyana Bank for Trade and Industry (GBTI) in partnership with the International Finance Corporation (IFC) last evening unveiled a Trade Finance Facility that will allow local businesses to import commodities from almost anywhere in the world.
“It is now up to the intended recipients, you the business sector, to make full use of this trade finance facility which is being made available by the IFC for your benefit,” GBTI’s Chief Executive Officer John Tracey told a gathering of business persons at the Pegasus Hotel. “We are aware that the IFC has a lot more to offer. We are already engaged in discussions with the IFC for the provision of training of both our staff and business persons in the usage and advantages of this programme,” he said.
The IFC is the private sector arm of the World Bank and now has four offices in the Caribbean. “The trade facility is basically a financing mechanism through which IFC provides, using our international triple ‘A’ rating, to directly guarantee the trader credit…” said Jun Zhang, IFC’s Director for the Caribbean and Latin American Region.
The trade facility will provide credit enhancement to allow trade to take place, he said.
He added that they have been working with GBTI for the last 12 months to create the facility.
Last month, Tracey had said that the US$5M facility would allow local businesses to import commodities from almost anywhere in the world.
He had said the facility was extended to the bank after months of rigorous scrutiny of its systems and balance sheet by the IFC. The facility will see the establishment of letters of credit through over 200 banks in over 100 countries.
It was explained that local banks usually have to put up cash for lines of credit on behalf of their customers because they do not have credit ratings with the large US banks and this causes constraints for locals.
All letters of credit established by GBTI via the facility will be backed by the IFC so the bank will not have to put up cash collateral.
Tracey had said that the facility is open to all businesses and individuals looking to import items with no collateral necessary.
He had noted that commissions will be paid on the credit instead of interest with the rate being about .25 of a percent compared with the current 1% and 1.5% being charged.
Last evening, he disclosed that part of discussions with the IFC is for assistance for GBTI to develop a risk-based model of management that few banks in the Caribbean have at the moment.
Finance Minister Dr. Ashni Singh urged the private sector last evening to be attentive to external opportunities and capitalise on them, in order to prosper and grow. He disclosed that the IFC is currently working with an investor here on a major project that when it materialises “it is a project on a scale such as we haven’t seen for a very, very long time, such as we probably haven’t seen in Guyana and when it would have materialised…it will have a phenomenal catalytic and transformative effect in our country.”
