Although Linden will continue to have a credit facility that offers small loans, it is anybody’s guess when its operation will restart since the entity expected to manage the new Linden Economic Advancement Fund (LEAF) is yet to be registered and its board members assigned.
Demerara Enterprise Network (DEN), the expected new entity, housed at the Region 10 Business Center, along with the Linden Economic Advancement Fund (LEAP), already has a front office in the building with its name, but it is not staffed.
International Project Manager of LEAP Kathleen Whalen told this newspaper last week that DEN is not registered as yet, but they are preparing all documentation and putting procedures in place to have it registered.
Only when this new body is registered it will be able to manage the Fund, which has given no loans for six months now.
According to her, LEAP has recommended some names to be on the six-member DEN board, and these recommendations along with a draft of how DEN is expected to operate are with the Cabinet.
Whalen explained that the decision by the government to transfer the credit fund to DEN and have it remain in Linden to promote small business development was “more than we had counted on.”
And regarding the Board, she said that it will certainly have people with relevant experience and it is expected to include persons from the Chambers of Commerce in Region 10, the manufacturers’ association, and Go-Invest and since its assets belong to the government, representation from notable agencies.
Since March 31, no loans were given out under LEAF, and Whalen said that she is “really anxious to get this back on line.”
The credit programme is expected to be smaller, “and will be built up slowly,” Whalen noted. Part of DEN’s operating income will come from the management of the credit facility. A number of LEAF clients are currently on a loan freeze in terms of repayments on the principal and the interest, since a number of them were seeking to refinance or re-negotiate their loans.
DEN will become the managers of the Fund that was originally slated to receive 1.9 million euros under the 12 million euros LEAP, since the contract of the former managers, Caricom Insurance, formerly GuyFlag, ended in June and was not renewed.
However, Caricom Insurance is expected to collect the loans due by clients over the next four years, and must return the full sum of the credit facility to the government.
Whalen said that the former managers did not receive the full 1.9 million euros as expected but only 1.6 million euros, and already they have repaid $50M of the $465M received. Their next payment will be in December. The repaid sum is expected to be placed back into the credit facility.
Whalen’s term as manager now ends in December 31, after LEAP was granted an extension of its technical assistance programme until December, following the end of a first extension in July.
The entire LEAP programme was originally expected to end after seven years in June 2009. Whalen and a number of staff members were hired through TRANSTEC, a Belgium company that won the public tender to manage LEAP and certain components of LEAP, like providing supervisory assistance to LEAF.
Therefore some of LEAP’s current staff will remain toward the end of the year under this technical assistance programme. Whalen and the staff will also continue to have access to the vehicles used by the LEAP programme until December.
Reduced staff
LEAP and LEAF had a combined staff of 25 persons while DEN is expected to have less than 10 persons. Whalen explained that since the entity will be locally funded it will have to cover costs and so there will be no infrastructural component, hence no need for engineers.
A number of LEAP staff will be seconded to DEN until December and will continue to be paid by TRANSTEC under the technical assistance contract.
LEAP itself is currently undergoing closure and is expected to let go of more staff next month, and to continue to reduce until December. Whalen’s office space along with others is already up for rental since the rent will become part of DEN’s income.
DEN is expected to continue to provide advisory services, manage the demonstration farm at Moblissa and the credit facility as well as the incubator at the Business Center and the industrial incubator at Kara Kara inside the old Guyana Stores building.
A section of the building houses the Toucan Connection Call Center. Government-owned NICIL had refurbished most of the building at over $100M, and rented space to the call centre but LEAP had refurbished a section of the property for the industrial incubator.
DEN is also expected to conduct marketing and support Go-Invest investment promotions, said Whalen.
It is hoped that by December, DEN will be experienced enough to effectively manage its operations. Whalen said that she believes that there has been sufficient capacity development in Linden to manage DEN.
No new works
The multi-million annual work programme for LEAP included support to the Chambers of Commerce, the regional planning arm, training, the farmers’ association and infrastructural works and its final work estimate ended July 30.
“LEAP cannot make any further commitments,” said Whalen. In addition to the extension of the technical assistance contract, the government and the European Commission (EC) also granted an extension to the financing aspect of LEAP, from June 30 to December 31, 2010.
Meanwhile, the original worth of LEAP which is 12 million euros is the same sum being spent during these extensions. However, under the financing agreement that was extended until December 2010 there will be three infrastructural projects, but these will be managed by the Finance Ministry, through the NAO Task Force at the ministry.
Two of these projects concern repair of drains and side roads in Mackenzie and another for the construction of a bond and container transshipment facility at the Omai wharf at Christianburg. For some time now these projects were expected to be done by LEAP before it ended.
