Dear Editor,
We refer to the Business Editorial appearing in Stabroek News of September 27, 2019, entitled `The PSC must embrace the entire business sector’. The Private Sector does just that.
The Private Sector Commission of Guyana was established in 1992 by five Private Sector Associations with the aim of bringing together all Private Sector Organs and Business Entities under the purview of being one National Body. The Private Sector Commission is governed by a Council, which comprises the Heads of all Member Sectoral Organizations and a number of elected members.
The Private Sector Commission is the apex private sector body in Guyana, representing businesses and business support organisations across the length and breadth of Guyana. The Commission is all embracing of the entire business sector, representing more than 20 of the largest Corporations in Guyana and 21 business support organisations.
Members of the Commission are: the Georgetown Chamber of Commerce, the American Chamber of Commerce (Guyana), the Guyana Manufacturing and Services Association, Berbice Chamber of Commerce and Development, Central Corentyne Chamber of Commerce, Linden Chamber of Commerce, Forest Products Association of Guyana, Bartica Chamber of Commerce & Industry, Aircraft Owners Association of Guyana, Guycraft Producers Association, Guyana Association of Bankers, Guyana Gold and Diamond Miners Association, Guyana Association of Private Security Organisations, Guyana Rice Exporters and Millers Association, Insitute of Private Enterprise Development, National Aquaculture Association of Guyana, National Air Transport Association, Rupununi Chamber of Commerce & Industry, Shipping Association of Guyana, the Consultative Association of Guyanese Industry and the Tourism and Hospitality Association of Guyana. The Commission is most certainly not “an exclusive club”.
These individual private sector organisations, altogether, represent a substantial cross-section of private sector businesses and corporations, small, medium, large and corporate, across the entire country and, which collectively, account for a contribution of more than 80% of Guyana’s Gross Domestic Product (GDP) in terms of aggregate expenditure.
In fact, the mission or core objective of the PSC is to be the leading advocate for the private sector on publicly articulated and shared positions on national issues, focused on promoting, political stability, socio-economic growth and development through the creation of a strategic partnership with the Government and other stakeholders. The PSC, as the apex body, deals primarily with national cross-cutting issues at a policy level with respect to the country’s economic development.
Small businesses are effectively and actively represented by the business support organizations such as the Georgetown Chamber of Commerce, the GMSA and the Institute for Private Enterprise Development (IPED) for example, which fall under the purview of the Private Sector Commission as the umbrella or apex Private Sector organization. The PSC functions, for instance, through a number of Sub-Committees, one of which is the Trade and Investment Sub-Committee, which, most certainly, deals with small business interests.
Further, on the subject raised in your Editorial, on commercial banks’ lending to micro and small businesses, and the constraints of financing to small businesses, the real constraints are the regulations governing commercial banks.
Commercial banks are deposit-taking institutions – thus, having the responsibility to protect depositors’ funds demanding that they engage in prudent lending policies and practices.
Microfinance institutions and venture capital firms operate differently from commercial banks in terms of their structure. Microfinance institutions undertake a more hands-on approach to helping their clients manage their business, including the extensive field work and they even have training programmes for their clients. Moreover, the financing structure of these institutions – that is, the source of their financing, is different from the commercial banks. They are not deposit taking institutions, their capital is actually shareholders’ funds, accumulated surplus or donor funds.
The source of financing and the way microfinance institutions, in contrast to commercial banks, are designed, are all fundamentally different. To suggest, therefore, that a commercial bank should, in effect, function as a micro-finance institution and that of a venture capital firm is ill conceived.
The Commission is the first to acknowledge that there is a need for further development of the local capital and money markets with more innovative products to meet the demands of the MSME sector. These are, in fact, national cross-cutting issues which relate to capital market development and which actively and continuously engage the attention of the Private Sector Commission in support of small businesses.
Yours faithfully,
Joel Bhagwandin, M.Sc.
Economist/Manager
Private Sector Commission of
Guyana Limited
