TRANSFORMING GUYANA’S ECONOMY THROUGH THE POWER OF SMEs

The Bharrat Jagdeo Demerara River Bridge, the various new highways around Georgetown connecting the East Coast and the East Bank of Demerara, the new highway from Linden to Mabura, the six new regional hospitals, the soon-to-be commissioned gas-to-energy plant in Wales, etc, are truly transformative projects, bringing our infrastructure closer to that of a high middle-income country. The widely anticipated development bank to support micro-, small- and medium-sized businesses has similar potential to further transform Guyana’s economic development.
During the Elections 2025 campaign, President Irfaan Ali and the PPP articulated a policy priority for the development of small and medium enterprises (SMEs), providing avenues for persons to become engaged in small business development and adding to family incomes. Indeed, the General Secretary of the PPP and the Vice President of Guyana, Dr Bharrat Jagdeo, ensured that this policy priority was highlighted in the PPP Manifesto 2025. The specific policy priority that was the development of the Guyana Development Bank (GDB).
Ensuring another of its manifesto promises is kept, the PPP Government introduced the GDB bill for its first reading in Parliament last week. The GDB, a state-backed financial institution slated for launch this year, will provide zero-collateral, zero-interest loans to businesses, youth, women, and persons with disabilities. This initiative, as President Irfaan Ali and VP Bharrat Jagdeo have previously noted, forms part of the Administration’s broader vision to empower local entrepreneurs, stimulate innovation, and dismantle long-standing barriers for SME entrepreneurs to financing.
SMEs are pivotal in driving economic growth and employment in developing countries and emerging economies, contributing significantly to GDP and job creation. However, across the board, SMEs face a major challenge – a persistent financing gap. SMEs usually are unable to compete with Big Business for access to essential capital for growth and innovation. This stifles their efficiency and growth and reflects a broader market inefficiency in allocating resources to where they can be most impactful. The World Bank Group estimates that about 40 per cent of formal SMEs in developing countries cannot get credit, for an unmet financing need of $5.2 trillion every year, which is equivalent to about 19 per cent of these countries’ GDP.
This is true for Guyana, despite the efforts of organisations such as the Institute of Private Enterprise Development (IPED) and various other instruments operated by Government and private banks. In response to the finance gap challenge that SMEs, particularly the micro-enterprises, face, the PPP Government has now moved forward with the legislation and the commitment to initiate the development bank. The legislation sets the authorised capital of the bank at $40 billion while also granting the Minister authority, “by order subject to negative resolution of the National Assembly”, to amend the capital amount. The bank shall be exempt from the payment of tax on the profits and income.
In terms of lending, the bill imposes a ceiling stating that “the bank shall not provide loans exceeding three million dollars to any person or enterprise”, although this limit may also be adjusted through Ministerial order subject to parliamentary scrutiny. For this amount, there will be zero interest and no collateral requirement, and the bank will provide training, mentorship and business support. The bank prioritizes support for first-time entrepreneurs, youth and young professionals, women-owned businesses, persons with disabilities, farmers, agro-processors, creative and service providers.
With this legislation soon to be enacted into the laws, Guyana now stands as one of just a handful of countries with a dedicated development bank for SMEs. Other countries include Malaysia, Saudi Arabia, Qatar, Bahrain, Lithuania, and Singapore. At one time, we had the famous Younis SME bank in Bangladesh. But the SME development bank which Guyana is establishing will offer financing to micro-, small- and medium-sized enterprises with zero interest rates. It will also not require collateral for small loans.
SMEs are the backbone of most economies, representing around 90 percent of all businesses and accounting for more than half of global employment. In developing countries, SMEs are central to economic diversification, productivity, and poverty reduction. According to the World Trade Organization (WTO), SMEs are responsible for about 70 per cent of all jobs and about 35 per cent of GDP in developing countries.
When I was Minister of agriculture, I was puzzled why one of Guyana’s leading manufacturers was importing raw turmeric to process turmeric powder because farmers in Region One were producing high-quality turmeric. I found that it was cheaper for the manufacturer to import because the transportation cost from Region One to Georgetown was prohibitive. With the help of FAO and IICA, we procured equipment, installed it at Hosororo and permitted no-cost semi-processing of turmeric that allowed reduction of weight from eight to one pound, thus reducing transportation cost by seven-eighths. This programme collapsed between 2015 and 2020 under the PNC-led APNU/AFC Government.
Turmeric semi-processing for SMEs involves transforming raw rhizomes into value-added products like dried slices, powders, or extracted oleoresins/curcumin. This helps farmers and small businesses bypass heavy transportation costs, reduce post-harvest losses, and access higher-margin export or food-additive markets. We had instructed the Guyana Shop to purchase the semi-processed products from Hosororo and made it available at cost-recovery prices to the manufacturer. The same can be done for ginger.
Recently, President Irfaan Ali, working with the GDF and the people of Lethem, made an arrangement for mangoes to be shipped to Georgetown during the mango season in Lethem. But we can do even better by nurturing SMEs to produce value-added mango products.
Guyana has taken a huge step forward in transforming our economy. While big companies and entrepreneurs now have unlimited possibility in the new Guyana economy, President Irfaan Ali and the PPP are creating an empowering milieu to ensure the full integration of micro-, small and medium size enterprises into the new Guyana economy. We must find a way not only for local content, but for families and small businesses to integrate into big companies, local or international.