Guyana will strengthen supervision and the regulatory frameworks of its financial system as well as boost transparency with the third and last programmatic policy-based loan of $5 million approved by the Inter-American Development Bank (IDB).
The program is helping consolidate the supervision capacity of the Bank of Guyana, increase dissemination of financial sector information, and support the implementation of legislation to combat money laundering and financing of terrorism. In addition, the project is also supporting measures that will help expand access to financial services.
Thanks to the 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.
As part of the policy-based loan, Guyana has recently approved three pieces of legislation to strengthen oversight of the financial sector. These regulations give the Central Bank 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 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 $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 6 years and a fixed interest rate. The other $2.5 million will come from the IDB’s Fund for Special Operations. This portion will have amortization and grace periods of 40 years, and an interest rate 0.25 percent.
- Mildred Rivera