A US$5 million ($1B) loan from the Inter-American Development Bank will be utilized to consolidate the Bank of Guyana’s supervision capacity, boost access to financial services and bring about more transparency, the IDB said in a release yesterday

The IDB approved yesterday the US$5 million loan to strengthen Guyana’s financial sector and the programme will support one of the three pillars in the IDB Country Strategy for Guyana (2009-2012), namely the Competitiveness Strategy.

It is aimed at increasing access to financial services, enhancing transparency of financial sector issues and enhancing macroeconomic stability, the release stated.

It said further that the IDB’s lending is the second in a series of three consecutive programmatic policy-based loans which had been previously announced for the sector of US$5 million each.

Moreover, the financing will also support measures to curb money laundering while promoting increased access to credit and other financial services for firms and individuals in order to foster the development of productive economic activities.

Results from the second programmatic loan include the passage of the new Act on money laundering and financing of terrorism, which includes the establishment of a Financial Intelligence Unit.

New Building Society

It also supports preparing the draft of new legislation for the creation of a Credit Bureau; enhancing coordination and sharing information among supervisory agencies; and bringing the New Building Society under Bank of Guyana supervision.

The third operation will see the conclusion of some of these reforms which would make the financial sector more resilient to both internal and external pressures and at the same time more responsive to the evolving financial needs of Guyana’s private sector and public in general.

The IDB’s  lending consists of a US$2.5 million credit from its ordinary capital for a 30-year term with a six-year grace period, and a US$2.5 million loan from its Concessional Fund for Special Operations for a 40-year term, 40 years of grace, and 0.25% interest, the release added.