Almost a year after President Donald Ramotar launched the US$5 million Low Carbon Development Strategy (LCDS) Micro and Small Enterprise Development and Building Alternative Livelihoods for Vulnerable groups (MSE) Project, funding has now been cleared for beneficiaries under both the loan and grant components.
Stabroek Business understands that the Guyana Bank for Trade and Industry (GBTI) and Republic Bank along with the Institute for Private Enterprise Development (IPED) have, together, approved loans totalling around $80 million to borrowers on the recommendation of the Small Business Bureau (SBB).
This news comes in the wake of criticism by would-be beneficiaries of the year-long delay in approving of funding for the MSE project which is slated to provide thousands of jobs and to change the face of the small business sector across the country.
Minister Irfaan Ali
SBB Chief Executive Officer Derrick Cummings told Stabroek Business he believed the delay was “both unavoidable and justified.” He said that while the impatience of people waiting to press ahead with livelihood-related projects was understandable, “there are essential protocols and procedures that simply must be followed when project partners include public and private sector partners and international agencies.
Now that those have been satisfied our aim is to ensure minimum delay in the rollout of the project,” Cummings said.
Of the $80 million in bank loans approved so far, a total of $67 million have been approved by GBTI, while $9.2 million were cleared by Republic Bank.
IPED has approved loans under the project totaling around $400,000. It is anticipated that the outcomes of the investments that will be facilitated by these loans will yield 42 jobs.
The sectors that have benefited from the bank loans include low carbon manufacturing, ecotourism, fruit and vegetable farming and entertainment. A further $62.3 million in bank loan funding is in the pipeline for imminent approval. The Bureau is providing collateral cover for up to 40 per cent of bank loans.
Meanwhile, financial allocations totalling approximately $8 million in small business grants being administered directly by the Bureau have been approved. The grants which are limited to a maximum of $300,000 per applicant have been assigned to projects in the art and craft, ICT, furniture manufacturing, agro processing, ecotourism, aquaculture and food processing sectors.
Stabroek Business understands that most of these grants have been allocated to applicants in Regions 2,3,4,6 and 10. The grants are administered by a committee headed by Chairman of the Small Business Council Srikrishnalall Pasha. Cummings said the allocation of resources under the project seeks to ensure that people across the regions benefit optimally from the project. “There are several layers of oversight attached to the project and both the subject minister [Acting Tourism, Industry and Commerce Minister Irfaan Ali] and the Chairman of the Council are concerned with transparency,” Cummings said.
The MSE project seeks to provide two important and elusive components for entrepreneurial development: access to financing, which has been a source of contention between local small business aspirants and the commercial banking sector and business training. Cummings told Stabroek Business that the training regime had already enabled grant beneficiaries to prepare their business proposals as a condition for receiving their grants.
Stabroek Business understands that the SBB is to undertake another round of visits to project sites for which grants have already been approved preparatory to the distribution of funds which is scheduled to take place next month.
On February 27, 2013, the LCDS MSE project, funded by the Guyana REDD+ Investment Fund (GRIF), received approval from the IDB Board, which included the release of US$5 million from the GRIF for the first phase of project execution which covers the initial two years.
The MSE project is funded from earnings for forest climate services achieved by Guyana under its partnership with the Government of Norway, which comes to an end next year. Cummings explained that the IDB, with which the Government of Guyana is partnering, brings significant experience in the areas of international best practices with respect to financial, social and environmental considerations
The SBB was established under the Small Business Act of 2004 with a mandate to coordinate programmes for small business development and promote issues relating to or affecting small businesses.
So far this year, a total of 393 persons have benefited from training under the project: 246 have been trained in the preparation of business plans; 121 in market research and 26 in basic record keeping. Cummings said that by mid-December a further 400 persons will be trained.
