A micro- and small enterprise development project identified by the Guyana Government has gotten clearance for funding under the Norway forest protection deal and US$127,476 has been allocated for the preparation of project proposals
Government has identified the development of micro and small enterprises (MSEs) and providing alternative livelihoods to vulnerable groups as a key component of the Low Carbon Development Strategy (LCDS).
Against that background, the GRIF (Guyana REDD+ Investment Fund) Steering Committee on October 14 approved the start of work for the micro and Small Enter-prise Development and Building Alternative Livelihoods for Vulnerable Groups Project, said a press release from the Office of Climate Change, Office of the President. GRIF is the mechanism through which the Norway funds are disbursed.
This project aims to address two of the major bottlenecks that constrain the development of MSEs and the ability of vulnerable groups to build alternative livelihood in Guyana.
According to the release, these bottlenecks include limited access to finance and limited technical and business skills. It will also strengthen the Small Business Bureau which will administer the business components of the project.
The approval clears the way for mechanisms to be established that will benefit start-ups, micro and small enterprises and vulnerable groups with feasible business development proposals.
They often find it difficult to access loans because of the high degree of lending risk they carry and deficiencies in the requisite skills and training that is necessary to successfully develop and implement their business ideas. And through the MSEs project the government will mitigate these implementations through multiple interventions.
With regards to access to financing, MSEs will benefit from two mechanisms, a Mutual Guarantee Fund, and a Low Carbon Grant Scheme.
The Mutual Guarantee Fund is a pool of money that is used to secure part of the collateral requirement of the lending institution to allow a promising MSE and vulnerable group business loan proposal to be accepted by both parties, thereby enabling an MSE to obtain a loan at an affordable rate.
And aย Low Carbon Grant Scheme is another pool of money set aside to assist vulnerable persons to access financing for their existing or potential business ventures. Eligible persons will be those who are already operating a business and require additional financing.
Meanwhile, lack of skills will be addressed through a Training Voucher Scheme which will enable MSEs to obtain the skills they require at existing training institutions such as IPED, Empretec, business schools or the University of Guyana.
The Project Management Supportย component will finance the project administration costs for all areas and includes hardware, software, salaries for additional staff, training, knowledge exchange trips and consultancy services.
In addition to the interventions for the clearing of bottlenecks, the project will consider the developmentย of an innovative Incubator Hub which will enable MSEs to quickly develop and become competitive through networking and providing access to sources of funds, media exposure and a modern knowledge centre.
It will also consider the establishment of an MSE Business Centre to support the start-up of small businesses through advisory and technical assistance, confidential business counselling, and support in the development of business plans and financial projections.
The GRIF Steering Committee is chaired by the Government of Guyana and consists of the Govern-ments of Guyana and Norway, with Guyanese and Norwegian NGOs as observers.
As part of the approval to start work on the MSE project, the Steering Committee allocated US$127,476 to the Inter-American Development Bank for the administrative preparation of project proposals as part of the approval. The IDB was asked by the Government of Guyana to act as a Partner Entity for the project.
In November 2009 Guyana and Norway signed a Memorandum of Understanding and a Joint Concept Note in which Norway committed to providing financial support of up to US$250 million by 2015 for results achieved by Guyana in limiting emissions from deforestation and forest degradation which will support the implementation of Guyanaโs Low Carbon Development Strategy.
Under the MOU contributions are channelled through the multi-contributor Guyana REDD+ Invest Fund, established in October 2010 for priority projects identified in the LCDS, the release concluded. US$70M was transferred from to Norway to the World Bank which is providing intermediation services. Only a small portion of this money has been approved thus far for disbursal.
