New development bank to start up with US$200 million in tranches

Last Updated on Thursday, 2 October 2025, 21:56 by Writer

Guyana would be providing US$200 million as seed capital to a new development bank that would be established next year, Vice President Bharrat Jagdeo said Thursday.

He said the first amount of cash for that financial institution would be set aside in the 2026 national budget expected early in the new year.

According to Dr Jagdeo, the funds would be provided in tranches, based on an assessment of demand.

He was confident that with mentoring, financial and marketing literacy, and technical advice, borrowers would be able to repay loans into a revolving fund. “We anticipate that if you work with businesses themselves in a hand-holding fashion that you’ll be able to get the loan repaid and the money can go into a revolving fund,” he said.

Mr Jagdeo also said the government would be disbursing capital to that financial institution periodically. “With periodic injections from the government over a period, as your revenue grows you can periodically get more capital into the bank,” he said.

Mr Jagdeo forecasts a likely 10 percent “failure rate” typical of any system globally.

The Guyana government was currently developing a concept paper for the proposed development bank.

The Guyana Cooperative Agricultural and Industrial Development Bank (GAIBANK), which was established under the People’s National Congress (PNC) government in the 1970s, was dissolved in 1995 by the People’s Progressive Party Civic (PPPC) due a high level of non-performing loans. The GAIBANK operations were then merged with the Guyana National Cooperative Bank (GNCB) which subsequently closed its doors in 2002.