In an effort to provide financial assistance to investors in forestry, a $900 million revolving fund was on Tuesday launched by the government.
Finance Minister Dr Ashni Singh officially launched the fund at the Arthur Chung Conference Centre, Liliendaal, saying it will create room for a significant increase in production and further build the market.
The memorandum of understanding for the fund was signed last year between the Ministry of Finance and the Demerara Bank Limited.
“We see the forestry sector continuing to play an important role within the context of the sustainable management of Guyana’s forest resources for the long term in the interest of Guyana continuing to make our contribution to the global fight against climate change,” Dr Singh said.
Last October, President Dr. Irfaan Ali pledged government’s commitment to working with forestry stakeholders. The intent is to increase productivity and foster sustainable forest management practices. The fund indicates government’s recognition of the constraints businesses face with accessing financial support to ramp up production.
The loans from the fund will be granted with an interest rate of 4 per cent. Dr Sing warned borrowers that all loans must be paid on time for it to continuously revolve.
“The borrowers have a responsibility. We want this fund to perform well. We want everybody who borrows from it to do well and for their business to grow. We expect them to repay the monies they borrow,” Dr Singh warned.
Dr Singh also said that this initiative represents an important example of partnering with the private sector.
Demerara bank’s Chief Executive Officer Pravinchandra Dave reiterated the support of banks to assist businesses with accessing finance. The injection of finance will act as a catalyst to aid the recovery of the forest sector through investments to facilitate value-added production, increased allowable extraction and recovery rates.
“We believe that the benefit of the bank should go to all sectors of the society. We are not working only for the shareholders or few entrepreneurs or few businessmen.
“16 per cent of our lending goes to agriculture, 10 per cent to oil and gas , 11 per cent to telecommunication and we found that three sectors are neglected – forestry, agriculture and mining.
“We are working out a project in which we can help these three sectors,” the CEO said.
Guyana’s forestry subsector provides employment for some 22,000 persons, of which some 4,000 persons are women in communities. Funding for the sector will support small loggers and sawmillers to invest in improved machinery and equipment to increase recovery and the quality of finished forest products.
Further, the subject Minister Vickram Bharrat said this is important especially with the signiant progress made in Guyana to maintain the country’s forests. He acknowledged the Guyana Forestry Commission, the Environmental Protection Agency and all other agencies that add to the conservation of the forests and noted that Guyana has embarked on a reforestation journey.