Local businessmen, who are eager to get a slice of the oil and gas pie, are finding it difficult to do so given the high commercial lending rates at the banks. This was noted moments ago by President of the Georgetown Chamber of Commerce and Industry (GCCI), Nicholas Deygoo-Boyer.
During an exclusive interview with the Guyana Standard, the GCCI President said, “A lot of our members have identified two things, the cost of financing and the ability to secure funding. When you go to the banks, they require a lot of collateral which most small businesses do not have. A lot of businesses are eager to start up for the oil industry and they are unable to do so because this remains one of the biggest issues.”
The GCCI President said that even if the companies are able to pledge the required collateral, payment is constrained by the fact that the oil companies take about 60 days to settle payments for contracts awarded.
Deygoo-Boyer said that while the Chamber has not approached Central Bank or the Bankers Association on the issue, the commercial banks were engaged. Unfortunately, those efforts, he said, proved futile.
“We spoke to the banks individually but everyone there is basically saying that that is the way things are,” expressed the GCCI President.
He noted however that the matter was brought to the attention of ExxonMobil’s Centre for Local Business Development (CLBD).
Also contacted on this issue was Central Bank Governor, Dr. Gobind Ganga. He said that the Bank of Guyana does not interfere in the interest rates used by the banks. “It is allowed to be an open market so we don’t regulate or try to influence the rates,” the Governor expressed.
Dr. Ganga further stated, “One of the reasons why interest rates are so high is because of the risk associated with borrowing. You have to understand that everyone will not get the same interest rates. You would not get the same interest rate as say DDL. Some people can borrow as low as six to seven percent when you look at the prime lending rate which is the best rate they will give to the best customer and those rates you would find are competitive,” the official said.
Contrary to popular belief, the Central Bank Governor further stated that Guyana’s interest rates are comparable with others in the region.
