-cottage industries encouraged
Residents of Linden and surrounding communities are being encouraged to invest in cottage industries with the availability of a new $100M loan scheme investment by the Caricom General Insur-ance Company Inc (CGIC).
This announcement was made at a recent launching of the new fund by CGIC at its Linden office, where entrepreneurs and prospective business owners were challenged to invest in cottage industries.
According to Fund Manager Leonard Forde, CGIC is optimistic that the necessary economic development of Linden can be achieved through cottage industries. He alluded to the prospects in fish farming and the establishment of a cement bond, among others, while at the same time making provisions for other small business ventures. It was noted that there are several business persons in the agriculture field who have large quantities of land but could only make use of a small portion because of the lack of proper available financing and markets for possible produce. “We would not shy from the idea of establishing a market centre where we could play a major role in ensure that there are ready markets for those farmers who take advantage of the loans to expand their business in the agriculture sector,” said Forde.
CGIC had secured the contract to manage the now completed Linden Economic Advancement Fund (LEAF), for which they have the responsibility of collecting outstanding monies from clients. According to Forde, the LEAF component of CGIC has had its fair share of challenges with clients repaying loans, especially those borrowed for business expansion and startups in the medium loan category. “Some of them actually failed because of overpricing in their estimates and it led to their business being incapable of sustaining their installment… there is also evidence of persons who took loans and never paid a single installment,” he said.
He also noted that some people did not even use the loan for the purpose which they proposed.
Forde said that the successes mentioned by LEAF were noted primarily among clients who secured loans under the small and micro options. “…It was those persons who took loans in the medium category that were the biggest disappointment…. Those were the persons who took amounts between five and fifteen million,” he explained. Despite the challenges experienced with the LEAF medium borrowers, CGIC has designed the new fund in such a way as not to cause any enmity or unfriendliness but to work with existing and prospective clients in the interest of developing Linden. “We are opening our arms to those who come and to see how we can help them reconcile with their businesses,” Forde said. He added that CGIC will be looking at ways of waving interests once it does not affect the fund, with the sole intention of putting those businesses back on stream.
Careful consideration has been given to the fact that there exists a potential trade base between Brazil, Linden and the rest of Guyana. In this regard, CGIC is eyeing the establishment of a storage bond, which would allow local entrepreneurs to source a number of products from Brazil while Brazilians can get Guyanese products. “Not every time a businessman is willing to travel to Georgetown to get certain things, or a businessman from Skeldon, having to travel all the way to Brazil to get supplies.
The distances can be significantly cut short if we can have them available here in Linden and at a manageable price,” Forde noted.
The fund is currently preparing to commence lending small and micro scale loans, which cater for lending up to $500,000. However, once encouraged, there is every possibility of CGIC giving thought to advancing to medium and large loans. Should this be realised, CGIC would be partnering with borrowers to insure and monitor the businesses. This, Forde said, would avert the existing problem of locating clients when in default.
