The Linden Economic Advancement Fund (LEAF) is expected to receive its final tranche of $254M – $30M less than expected since the 2005 exchange rate of the Euro will be used instead of the current rate.
LEAF is a component of the over $2B Linden Economic Advancement Pro-gramme (LEAP), a government of Guyana and Euro-pean Commission (EC) funded project to enhance and revitalize the economic position of Region 10.
LEAF Fund Manager Valerie Sharpe told Stabroek News last week that based on the information she has received from her superiors, CARICOM General Insur-ance Company Inc, the contracted managers of the Fund, the monies are expected to be transferred by this week. According to Sharpe, this transfer was expected last week, but this did not occur.
In January when this newspaper spoke with Sharpe, she had said that the EC had requested the 2008-2009 Business Plan, which she said was submitted. It was noted as well that all documentation to replenish the fund was submitted. Sharpe explained that the Business Plan was submitted to the LEAP Advisory Board for onward submission to the Finance Ministry.
LEAF and LEAP will end mid next year. While LEAF began operations in January 2005, LEAP started back in February 2002.
“My anticipation is very high,” noted Sharpe, speaking about the probability of the monies being received in the given timeframe. Speaking on the amount to be transferred she confirmed, “It has been reduced.”
She emphasized that the amount to be disbursed is now $254M, down from an expected $284M. With the current exchange rate of the Euro, the projected disbursement would have been $284M.
Sharpe explained that the 2005 exchange rate will be used instead of the current rate. Asked why this was so she said this was the information received from her superiors, but she did not give any further explanation.
The EC had withheld funding to LEAF back in 2005 after fraud allegations had surfaced against the contracted Fund manager, then named Guyana Fire Life and General Insurance Co. (GuyFlag), which now goes by the name CARICOM Insurance. However, these allegations were not in relation to the management of the LEAF Fund. And a subsequent inspection of the Fund last year by the EC did not unearth any mismanagement.
The Office of the Insurance Commissioner had been expected to make a ruling on the issuance of the insurance licence to the company last month, after expecting an audited report in January. It was believed that the licence may have had some bearing on the hold up of the monies, since the EU had written to the Insurance Commissioner late last year to inquire about the status of the license.
In the interim, while the monies are yet to be transferred, the Fund will be seeking to assist those persons who had their loans approved since last year, but had only received part sums. There is some $26M outstanding for loans that were approved.
Sharpe disclosed that the monies on hand will not be able to clear the entire sum outstanding but will clear more than 50% of the amount. The monies in this regard are expected to be disbursed in another week. “We are still not in a position to look at new loans,” she said, explaining that her phone continues to ring off-the-hook with inquiries from persons who are seeking loans for the upcoming Easter holidays and for the Linden Town Week in April.
A number of LEAF clients were hoping to receive loans since last year for the Christmas holidays but were left empty handed. Others too were expecting loans earlier this year to invest for Valentine’s Day and for Mashramani, but were also disappointed. Again expectations are high for loans to invest this month and next month.
Loan applications pending are worth some $255M – and this represents those persons who have applied for loans. To date, the EC has released $213.7M (this sum was disbursed since 2005) from the Fund, but as of December 31 last year, the Fund had disbursed $440.8M in loans, after recycling the funds. LEAF is worth 1.9 million Euros.
