Project will support microenterprise and small businesses, efforts to limit deforestation
A $5 million grant to be administered by the Inter-American Development Bank (IDB) will support the Guyanese Government’s strategy to reduce carbon emissions by re-orienting the economy onto a low carbon path, through the creation of the necessary incentives for the beneficiaries to invest in the low carbon sectors (LCS).
The program will consist of two components. The first component will mitigate the structural problems faced by the beneficiaries in the LCS, with regards to their limitations on access to credit. Three types of financial products will be supported by the program: (i) a credit guarantee fund; (ii) an interest payment support facility; and (iii) a low carbon grant scheme to assist potential beneficiaries with seed capital to start up or expand their businesses. The second component will address the issue of lack of access to proper training, by providing resources for technical and business development training activities for the beneficiaries of the program.
The target beneficiaries of the project are micro and small enterprises, which include individuals and groups without access to credit as well as those lacking appropriate business and technical training who have been affected by the restructuring of sectors such as mining and forestry. During the three year life of the program, it is estimated that 2,200 jobs will be created or sustained in the low carbon sectors with funds from this program.
This project will contribute to the reduction of economic activity in Carbon Emitting Sectors by facilitating the creation of employment via micro and small enterprises in low carbon emitting sectors as identified in the country’s Low Carbon Development Strategy. This will be done by creating incentives in accessing finance and business development training in order to set up and or expand a low carbon business. In his 2012 National Budget speech, Guyana’s Finance Minister Ashni Singh noted this importance of this project to the development of Guyana’s private sector: ‘The micro and small enterprise project will address the major bottlenecks in the development of a strengthened entrepreneurial and small business sector.’
This nonreimbursable investment grant program totaling $5 million is being financed with resources from the Guyana REDD+ Investment Fund (GRIF) Trust Fund and will be executed from 2013 to 2015 by Guyana’s Small Business Bureau (SBB), in coordination with the IDB, the Royal Norwegian Ministry of Foreign Affairs, and the International Development Association of the World Bank.