A $900 million revolving fund was launched last year to help investors in the forestry sector but with small suppliers still constrained by access to financing, the government will soon ‘step up’ and provide additional support.
This is according to Rafeek Khan, the Chief Executive Officer of DuraVilla Homes, who spoke to reporters on Monday.
Khan unveiled his company’s plans to deepen partnerships with local suppliers so that DuraVilla Homes can meet its target of producing 500 houses this year. To guarantee that those houses are produced, he emphasised that the DuraVilla Homes must get adequate supplies – be it wood, wood products or other fixtures- for each modular, timber house.
As the company forges ahead with a new consortium to guarantee the timely and affordable supply of products, Khan said DuraVilla Homes will also be working alongside the government to help local suppliers access money from the revolving fund.
“There is something that is going to happen in the coming days and that is, the Government of Guyana is going to facilitate a mechanism by holding companies such as DuraVilla Homes responsible for X amount of capital to the supply chain.
“The government is paying the supply chain on our behalf.
In other words, the government will stand as the guarantor for the bank that if the company defaults, then the government will stand liable,” Khan said.
This is necessary for two reasons, according to Khan. The first is that local suppliers have been faced with the challenge of accessing adequate finances to sustain and/or expand their operations. This is part of why the revolving fund was established in the first place.
However, Khan explained that the second issue is that not enough small suppliers are able to meet the necessary financial criteria to access money from the fund. So, the government is now stepping up to allow those suppliers to more readily access funds.
“We want to see this materialise.
“… We’re going to be seeing a mechanism in place to solve this,” Khan said on Monday.
