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Plans afoot to revive Agricultural and Industrial Development Bank

Last Updated on Sunday, 20 September 2015, 17:32 by GxMedia

A section of the gathering at the opening of the 11th Berbice Expo (GINA photo)

Government plans to revive an agricultural and development bank, a financial institution the Private Sector Commission (PSC) welcomes but emphasises must be properly managed. 

Prime Minister Moses Nagamoootoo at the weekend announced at the Berbice Expo that government has decided to re-establish the bank more than 10 years after it was wound up.

“To provide seed capital to investors and meet the financing needs of the agri sector, our government proposes to establish an Agricultural and Industrial Development Bank that would also operate in Berbice,” he said.

Nagamootoo hoped that the funds to be provided would help “hype up investment” in both agriculture and aquaculture.

The then wholly state-owned Guyana Agricultural and Industrial Development Bank (GAIBANK) was merged with fellow state-owned Guyana National Cooperative Bank (GNCB) before certain assets and liabilities were sold to Republic Bank (Guyana) Limited.

With rice falling on hard times due to the closure of the lucrative Venezuelan market and sugar yet to make a big comeback, the Prime Minister urged the gathering to stop relying on those two primary products. “The answer lies in diversification, which is the reason that makes this Berbice Expo important. You have signaled that we must not depend only on rice and sugar to create or maintain employment. We need to get into other types of business to create wealth, to promote jobs and offer a better life in our various communities,” he said.

PSC Chairman, Retired Major General Norman Mc Lean told Demerara Waves Online News that the re-establishment of GAIBANK was “long overdue.” “It’s necessary to help small farmers and to help with the development of agriculture generally,” he said.

He favours a public private partnership in such a bank that he stressed must be efficiently and effectively managed. “I think whatever is done we need to have proper management of the system… You don’t want to have a situation where you are lending money for good agricultural projects- because you have to study them, you have to do due diligence to make sure that it is a viable proposal before you lend the money and ensure that repayments are made.

At the time of GAIBANK’s fold-up, the then People’s Progressive Party Civic (PPPC)-led administration had said that commercial banks would have filled the void for agri-financing. The privately-owned Guyana Bank for Trade and Industry (GBTI) has been a leader in providing loans to rice farmers and others in the agriculture sector.

Experts, however, say that one of the drawbacks from commercial banks is that they do not conduct detailed analyses of loan applications but merely focus on collateral backing,  and the ability and track-record to repay.

Government’s announcement of the resuscitation of an Agricultural and Development Bank comes at a time when the market is flooded with various types of imported products including bottled water, fruit juices, icicles, cane juice, plantain chips, broccoli, cabbage and at times cut flowers.

The Government Information Agency (GINA) reports that approximately 90 companies are participating in the four-day 2015 Berbice Exposition and Trade Fair, which is ongoing at the Albion Community Centre Ground, Corentyne Berbice, Region Six. The activity commenced September 18 and will conclude on September 21.

The booths and businesses participating include food and beverage companies, cosmetics, banking services, and Government agencies among others. There are also the usual activities of providing games and entertainment for the visitors.