Small Business Trust granted $279M in loans in 2017

-outlay down from previous year

The Small Business Development Finance Trust Inc. (SBDF) granted $279 million in loans last year, a decrease of almost $28 million, according to its 2017 Annual Report.

The SBDF held its 17th Annual General Meeting on Wednesday at the Regency Hotel on Hadfield Street, where it was revealed that the amount of loans granted to micro, small and medium-scale businesses in 2017, fell by almost 100, dropping to 439, from 2016’s total of 532 and 2015’s 539.

According to the 2017 Annual Report, the 439 loans granted last year was the lowest that have been granted in 10 years. During this decade, the years 2010, 2011 and 2012 were the most productive when 685, 710 and 722 loans were granted, respectively.

The 439 loans granted last year carried a value of $279,317,000, as compared to 2016, when the loans carried a value of $307,307,000.

For the ten-year period of data provided in the annual report, the years 2012, 2013 and 2014 saw the largest loans, with the sums of $440,490,000, 440,204,000 and 438,790,000, respectively, being granted.

For last year, the average loan size recorded was $700,042, as compared to $577,645 in 2016 and $692,804 in 2015.

In terms of jobs created and sustained due to the granting of loans, the report showed that for last year, 2,869 jobs were created/sustained, as compared to 3,150 in 2016 and 3,456 in 2015.

So far, over the ten years, a total of 5,953 loans have been granted to the tune of $3,311,739,000. During that same period, a total of 24,934 jobs were created/sustained.

For last year, 45% of the loans were granted to the agriculture sector, while 30% went towards retail trade and services. The remaining 25% were distributed between fisheries, livestock, manufacturing, consumer and other sectors/activities.

Giving the Chairman’s report in the stead of Chairman of the SBDF Sattaur Gafoor, Director Mohammed Ali explained that they were able to create a surplus of $28.4 million from revenues of $79.9 million last year, along with consumers’ preference to use supermarkets for their needs.

“This sector showed a decrease on the number of persons assisted by 80 over the 2016 levels. Sadly many of the clients affected are females and single mothers,” Ali explained.

With respect to the development loans, Ali pointed out that the loans granted were mainly towards cash crops and rice farmers amounted to 199 last year, as compared to 225 the previous year.

He explained that during the early part of last year, many farmers stayed away from the first crop due to previous losses in 2016, which were caused by diseases, drought and carried over financial difficulties from the previous year.

However, during the latter part of the year, many of the farmers who stayed away from the first crop returned for the second crop with increased demands.

The SBDF granted 82 clients with a total of $53.7 million for the housing sector and Ali said, “Some of those clients do not have regular income streams, but are supported by institution which assists them in repairing or extending their residence in stages that match their receipts. This sector showed signs of improvement.”

For the commercial sector, which represents manufacturing and fishing, the report said that there has be little growth over the years.

“With a limited capital base, SBDF is unable to cater for high value loans requested by this sector. However, in 2017 the number of approved loans amounted to 17, compared to 19 in 2016. The average loan size for this sector is $206, 800,” the report noted.

In terms of future plans, the report noted that they are encouraged that the government has a budget for development, growth and sustainability for the small business sector.

“We are confident that with access to capital for small entrepreneurs coupled with linkages to a national economic strategy, this sector will play a major role in providing assistance to budding entrepreneurs. SBDF is here to stay and will work with all parties generally involved in the process towards providing a better future for all,” the report added. Managing Director of the SBDF Manjula Brijmohan also presented a report.

“It is my privilege to present an in-depth on micro and small enterprises with whom Small Business Development Finance Trust works every day. Development and growth of this sector is our responsibility along with the government’s assistance. Guyana is an agricultural economy and still remains a commodity trader,” she said.

Brijmohan stressed the need for ICT development in rural areas and said that in order for the country’s economy to face global competition, the linking of rural to urban areas through Information and Communication Technology is required.

She also noted that there is a need to facilitate connectivity, with inputs and knowledge of markets which can enable rural population to interact and choose the best supply sources.

She added that both the public and private sector need to work together to influence a decrease in production cost for farmers and agro-processors, and an increase in their minimum support price, based on local, as well as, international market competiveness. 

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