GuyFlag name change may impact on LEAF talks

A name change by the institution managing the Linden Economic Advancement Fund (LEAF) is likely to bring a new dimension to talks on the resumption of funding.

LEAF, a loan facility to aid growth and development in Region Ten, continues to survive on loan repayments, following the European Com-mission’s (EC) decision in 2005 to stop releasing funds to the entity, while it is under the management of the Guyana Fire Life and General Insurance Co Inc (GuyFlag). This decision came after GuyFlag was implicated in a $400 million insurance scam in September 2005.

GuyFlag is now operating under the name Caricom General Insurance Co, and according to a source, this will have to be factored into discussions between the EC and the government.

Since GuyFlag’s implication in the $400 million insurance scam in September 2005, the matter has engaged the attention of the court and the government had started a tendering process for a new fund manager last year. In February last year, the government informed GuyFlag that its contract was being terminated and the company had until August 22 to wrap up its management of the fund. However, there was later an extension to October and then to January 2007.

According to the source, there is no decision yet on the resumption of funding to LEAF, but the government and the EC have agreed in principle to a short extension.

The name change was now adding to the dynamics of the discussions and the impact of this would have to be assessed, this newspaper was told. It was noted as well that the government could not commit to GuyFlag for another extension, because that company no longer existed.

Meanwhile, LEAF Mana-ger Valarie Sharpe told Stabroek News last week that for the period ending Decem-ber 2006, 453 loans to the tune of $347.9M had been disbursed by LEAF. In a breakdown of these loans, the micro category got the majority – 356 loans; there were 72 small loans and seven medium loans. Some 23 clients were taken to court for defaulting on their loans but Sharpe said these were from the first set of disbursements. Sharpe could not project how many loans were likely to be disbursed this year since this depended on the continuity of funding, but a decision on this was likely by April.

LEAF has received 1,005 applications for loans from 40 of the 42 areas in Region Ten, totalling over $1 billion.

The two areas from which there were no applications were Hururu/Kibibriri and Bissarani/ Kurubuni.

Most persons taking micro loans were involved in vending or rearing poultry, while in the small loans category the clients were in the transportation business; the medium-size loans were mostly for sawmilling and logging. Pig rearing was another area which was now getting some attention, she said.

Sharpe would like to see more applications for manufacturing and agro-processing, in addition to handicraft development.

LEAF is a 1.9 million euros project funded by the European Union and the Government of Guyana, which are currently engaged in discussions to resolve the funding dilemma. A decision is expected by April, a reliable source said.

LEAF, a component of the Linden Economic Advance-ment Project (LEAP), was developed to revive business activity in Region Ten and to aid in the creation of 1,800 jobs by 2009, when the project’s life ends.