An Inter-American Develop-ment Bank (IDB) policy-based loan of US$5 million – the final of three tranches – will help in enhancing transparency and combating money-laundering.
With the third and last programmatic policy-based loan of US$5 million approved by the IDB, Guyana will strengthen supervision and the regulatory frameworks of its financial system as well as boost transparency, and IDB news release stated yesterday.
In addition, the project is also supporting measures that will help expand access to financial services. And through this project, Guyana is boosting efficiency with a framework for automated payments of public sector salaries and pensions, and also developing and implementing a system for a loss-sharing arrangement for large value transfers, consistent with international best practices, the release explained.
Meanwhile, Guyana has recently approved three pieces of legislation to strengthen oversight of the financial sector, as part of this policy-based loan.
These regulations give the Bank of Guyana the authority to supervise the majority of non-bank financial institutions, made up mostly of insurance companies, builders and money transfer businesses.
In an important step to increase access to credit, the release noted, the government also passed this year the Credit Reporting Bill 2009, which provides the framework for the creation of a credit bureau in Guyana.
With this third loan, the IDB has provided a total of US$15 million since December 2008 of budget support to accompany reforms of Guyana’s financial system.
Half of this latest IDB financing is made up of a loan from the Bank’s ordinary capital, with an amortization period of 30 years, a grace period of six years and a fixed interest rate.
The other US$2.5 million will come from the IDB’s Fund for Special Operations and this portion will have amortization and grace periods of 40 years, and an interest rate of 0.25 percent, the release added.