Finance Minister highlights relationship between economic growth and financial sector development

–as Security Interest in Movable Property Bill 2024 receives Parliament’s approval 

Senior Minister in the Office of the President with Responsibility for Finance and the Public Service Dr. Ashni Singh last evening while contributing to the debate in the National Assembly on the Security Interest in Movable Property Bill 2024, which sets out the legal framework to pledge movable property as collateral, reiterated that the Bill represents the latest instalment in a long sequence of legislative and other interventions made by the People’s Progressive Party /Civic Government to strengthen the financial sector.

“… an effort that we have been making over time in recognition of the very important and strong symbiotic relationship between economic growth on the one hand and financial sector development on the other, “Dr. Singh added.

The Senior Minister then reminded the National Assembly that current and past PPP/C Governments had been over time bringing to the Parliament and enacting modern financial sector legislation all comprising critical elements of a comprehensive legal architecture which would in turn establish a robust institutional architecture for a strong, stable and well-regulated financial system.

The various legislation in the financial sector form part of Government’s broad agenda to build and strengthen the legal framework and the Administration has remained committed to working with all stakeholders, including consumers and the private sector, in supporting business development in Guyana.

Amongst the financial legislation already brought to the House during previous Sittings in the past and later enacted and which Dr. Singh highlighted were the Bank of Guyana legislation and its subsequent amendments, the Financial Institutions Act (1995) and subsequent amendments, the initial Money Laundering and Prevention Act, the Anti-Money Laundering and Countering the Financing of Terrorism Act, the Money Transfer Agencies Act, the Credit Reporting Act and the Compliance Commission Act.

Minister Singh then described the Security Interest and Movable Property Bill last evening as the latest instalment in the series of legislation to strengthen the financial sector.

The banking and financial sector is an important sector Government has been placing specific focus on in order to empower citizens to benefit from the massive economic transformation taking place across the country. Access to financing is a main pillar for the establishment, growth and success of both small- and large-scale businesses, as well as the economic empowerment of individuals and households. Under the stewardship of the PPP/C Government, Guyana’s financial sector has shown significant improvements in recent years in key performance indicators, reflecting a strengthening economy and robust regulatory oversight.

Dr. Singh further highlighted the rapid rate of growth recorded by the financial sector, detailing that commercial banks’ deposits surged, growing by 67.8 percent at the end of June this year when compared with the position at the end of 2020, driven by rising incomes and improved confidence in the banking system.  He also noted that from the end of 2020 to the end of June this year, total credit to the private sector grew by 57.8 percent, fuelled by increased lending to economic sectors such as services, manufacturing, agriculture and mining and quarrying. Lending for real estate mortgage loans has also grown substantially (by 54.7 percent) over the same period. At the same time, the ratio of non-performing loans (NPLs) has declined from 10.8 percent at the end of 2020 to 2.1 percent at the end of June 2024, aided largely by a rebound in economic activities, post-pandemic and protracted elections and enhanced risk management practices. These trends highlight the country’s financial sector’s resilience and its pivotal role in supporting Guyana’s economic transformation..

Successfully piloting the Security Interest in Movable Property Bill 2024 through the House, Minister of Tourism, Industry and Commerce, Oneidge Walrond explained that the piece of legislation is critical and will pave the way for creating a more modern, inclusive and efficient system for secure lending in Guyana. She added that it represents another milestone in the journey to transform Guyana’s economic landscape by fostering financial inclusion, empowering small and medium sized enterprises and increasing access to credit.

“The Bill seeks to introduce a comprehensive modern and inclusive legal framework to govern security rights in movable assets. Its primary goal is to further modernise Guyana’s secure transaction system, addressing inefficiency and creating a unified, efficient, and technology-enabled structure aligned with international best practices,” Minister Walrond further explained.

The Bill, which received support from both sides of the House was subsequently approved.

Meanwhile, Dr. Singh, yesterday, in order to further aid and improve access to credit, tabled in the National Assembly the Financial Institutions (Amendment) Bill 2024, which caters for the establishment of representative offices by foreign financial institutions. Representative office of foreign banks brings international experience and technology and allows these institutions to showcase the products and services that can complement and enhance the domestic banking system.

These reforms demonstrate the Government’s continued commitment to strengthening the legal architecture and ensuring that all citizens participate in the new economy and benefits redound to all Guyanese.