The economic landscape of Guyana is shifting rapidly, driven by expanding sectors far beyond the notable oil and gas industry. President Dr. Mohamed Irfaan Ali has emphasized the need for a transformative approach in banking to keep pace with the country’s burgeoning scale of operations.
“As the sector grows, the scale of operation in the country will also grow. And this is not only for oil and gas. This is for every other aspect of value creation,” President Ali made the remarks at the April 16 opening ceremony of the Local Content Summit 2024 at the Pegasus Hotel.
Highlighting the diversity of growth opportunities, Ali mentioned financial services, insurance, infrastructure, agriculture, tourism, transport, logistics, pharmaceuticals, healthcare, and other services.
“Every single area… The scale of operation is changing. So we have to ensure that our business model is also reflecting that change in scale,” he said.
Such summits and seminars are pivotal, Ali noted, because they foster networking that “allows you to bring capital together, to bring human assets together, to integrate companies, and to build the scale that is required to address the opportunities ahead of us.”
However, he believes a significant overhaul is required in the banking sector to support these expansive efforts. President Ali criticized the conventional banking model which he finds overly cautious and focused on low-risk, high-return investments.
“That is not banking. That is a traditional approach to money management,” he asserted. Instead, he advocates for a model where banks actively engage in “utilizing the system through structural mechanisms to grow wealth and create wealth.”
The call is for more investment-type bankers who are adept at analyzing market opportunities daily. This shift demands the banking sector’s investment in analytical tools for defining and modeling opportunities effectively. “It requires the banking sector to use more analytical tools in defining the opportunities for the country, but importantly, in modeling those opportunities and then going out to their clients,” Ali explained.
This change represents a fundamental shift from a reactive to a proactive stance in banking, moving from merely financing presented opportunities to actively facilitating and investing in the development and expansion of the economy. President Ali concluded by highlighting the need for banks to transition from their “archaic” methods to becoming central players in deploying capital for new opportunities, which could yield significant returns.
This approach, he believes, is essential for leveraging existing liquidity into profitable ventures.
Ali’s comments strike at the heart of a longstanding issue of access to finance (the lack thereof) for Guyanese businesses looking to capitalize on the country’s growth trajectory. Private sector organizations continue to advocate for financial institutions to develop creative mechanisms to help businesses grow.
