Last Updated on Saturday, 9 March 2024, 16:35 by Written By Denis Chabrol
President Irfaan Ali on Saturday said the number of Non-Performing Loans (NPLs) in Guyana has dropped to 2.8 percent, the lowest in Latin America and the Caribbean, and more money is being borrowed for a wider variety of projects.
“That is not accidental. That is because there is more money in the economy. That is because there is more disposable income. That is because people are in a better position to service their loans,” he said.
Addressing the official opening of Republic Bank (Guyana) Limited’s GY$1.2 billion new branch at Williamsburg, Corentyne, Berbice, he explained that the level of NPLs in the banking sector at the end of December 2023 improved by 33.6 percent and now accounts for 2.9 percent of total loans. “Go through all the Central Bank figures throughout the region and compare it to this. Don’t even go through the region. Tell me what was the Non-Performing Loan (figure) in 2019; tell me what it is today. Result is what matters,” he said.
There is also expanded in lending to “every single sector”, he said, attributing that to careful, prudent management by government. As part of efforts to stave off the Dutch Disease, an economic phenomenon in which other sectors decline at the expense of others, the President said there was a wider variety of investments by the private sector. He noted that in real estate, there has been a 22 percent increase in mortgage, credit agriculture grew by 14.4 percent, construction and engineering by 21.7 percent, and mining and quarrying by 18 percent.
“We are seeing that the disbursement of credit and the dispersion of credit is around many sectors and that tells a story that the economy is being diversified and the economy is being built to avoid the Dutch Disease because investment is being made in every area of productivity and growth,” he said.
Overall, the President said, investments increased by 20.8 percent to GY$299 billion with 68.7 percent coming from local investors. “It tells you that the policies that the government is pursuing through local content development, through integration of the local private sector into the opportunities of the country is also bearing fruit,” he said.
Dr Ali also urged the banking sector to find ways of investing the huge amount of money by shifting towards investment banking. “We have to deploy this idle capital to productive use, minimising the risk and looking at the least risk investment opportunity,” he said.
