Guyana faces a critical obstacle hindering the participation of local businesses in the country’s local content development initiatives – the challenge of accessing crucial financing. This issue threatens to undermine the entire local content effort vital for the nation’s economic growth, as highlighted by energy expert David Goldwyn, renowned for his experience in the U.S. State Department.
“The greatest challenge faced by Guyanese businesses seeking to participate in local content development is the lack of access to financing for short-term cash flow or borrowing of equipment,” Goldwyn emphasized in a recent column published on November 17.
He underscored how Guyana’s banking system demands physical collateral, typically real estate, to secure loans, effectively obstructing new market entrants and potential local entrepreneurs from accessing financial support.
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“This blocks new market entrants and potential local entrepreneurs. Lack of financing risks undermining the entire local content effort,” Goldwyn added, expressing concern over the far-reaching implications of this issue on the country’s economic growth.
Goldwyn highlighted potential repercussions within the business community, stating, “It may also foster resentment or worry in the business community that it will be unable to participate in the growth of the economy.”
In addressing this pressing challenge, Goldwyn proposed various potential solutions. Among these, he suggested the implementation of creative banking regulations aimed at easing lending constraints and innovative financing options.
Drawing parallels to the U.S. Small Business Administration, he proposed the establishment of a Guyanese equivalent or a national enterprise fund tailored to support local businesses seeking to contribute to the country’s economic expansion.
Banks need to ‘get up off their tush’ and tackle access to finance issues – GCCI Head
Access to finance has long been an issue in Guyana. The Georgetown Chamber of Commerce and Industry (GCCI) has been advocating for years that the steep learning curve Guyana’s businesses have had to adapt to, must be paired with greater access to finance.
Its past president, Timothy Tucker, has been calling out local banks publicly to state the hurdles preventing them from making finance more accessible for Guyanese businesses looking to develop their operations.
