More concessions promised to help small businesses
THE Institute of Private Enterprise Development (IPED) has come in for praise for its support to small business people and President Bharrat Jagdeo says more concessions are in the pipeline for the group.
Acknowledging the sterling performance of the institute at its 14th annual general meeting at Le Meridien Pegasus Hotel in Georgetown Tuesday, the President congratulated it for doing an excellent job.
He said IPED has helped restore the spirit of entrepreneurship lost when at one period in the development of the economy, people began relying too heavily on the state for almost everything.
In so doing, President Jagdeo said, IPED has been able to create badly needed jobs.
Noting that institutions such as IPED can help develop this skill once again, he pledged that his government will work towards creating a supportive environment for micro-enterprise development in Guyana, given its potential for job creation.
"It makes it a hundred times more difficult for us to move forward in Guyana because we do not have a large private sector", Mr Jagdeo said.
To this end the President said that work is ongoing towards having a special bill tabled in Parliament, making provision for "a whole host" of concessions and procedures that would lead to the development of micro-enterprises.
This will reduce the burden on small fledgling businesses, giving them special incentives to grow faster, he said.
In a review of the institute's performance last year, IPED Chairman, Mr Yesu Persaud said that in the light of the sluggish performance of the economy in the first quarter of 1999, and given the urgent need to provide alternative, but sustainable employment for the poor, the Board of Directors redirected the focus of IPED "to face the challenges in our economy."
Notwithstanding the many difficulties experienced in 1999, the institute performed fairly well, he said, making a surplus of $80M compared to $70.5M in 1998.
During the period under review, the institute funded 5,057 macro and small loans to the tune of $770.7M, creating 9,022 jobs in the process, he reported.
After starting with $1M and 25 entrepreneurs in 1986, the spirit of entrepreneurship progressed steadily, and by the end of 1999, those figures increased by leaps and bounds, he noted.
Persaud that from $1M to be disbursed among 25 persons in 1986, in 1999 alone the sum of $770.7M was distributed among 5,057 entrepreneurs, who contributed $2.1 billion to the national economy.
And at a time when the public sector is shrinking and private investment not forthcoming at a desirable rate, IPED has done a remarkable job at filling the niche, by "blazing the entrepreneurial development trail" with its micro and small enterprise development programme, he noted.
Where many traditional financial institutions are hesitant to take the risks involved in lending at a time when economic fortunes are unpredictable, or big businesses waiting for a better investment climate, IPED has been able to effectively penetrate "high risk" areas.
The Chairman said that this led to the establishment of its Micro Centre at a cost of $8M, with the clear objective of giving undivided attention to micro and small enterprise sector structural adjustment.
This has won the support of the government and active participation from the Caribbean Development Bank, the United States International Development Agency and several other international agencies, he said.
In 1993, IPED disbursed an initial 54 micro enterprise and mixed activities loans, increasing to 2,544 on 1998.
Women overtake men
He noted that women represent about 80 per cent of all micro sector loans.
When IPED started operations in 1986, the first set of loans was disbursed among 18 men and seven women.
Men continued to play the lead role until 1994 when the opposite sex broke that tradition.
In that year 32 more women than men received loans. The figure then was 248 men versus 283 women.
This new trend continued in 1995 with 1,363 women against 1,009 men.
In 1996, there was a dramatic upswing in the ranks of the women and a rapid decline with men.
In that year, 1,335 women received loans as against 747 men. Women maintained the lead the next year - 1,832 versus 712.
Today the lead by women is at an all time high - with women securing 2,721 and men a mere 1,072 (less than 50 per cent of the women's).
Meanwhile, IPED'S Micro Sector loan scheme has scored another plus in promoting male-female cooperation in business and cementing male-female bonds in families.
In 1987, the first joint male-female loans were approved.
That category progressed steadily, and by the end of last year, 8,045 joint male-female loans were approved.
The institute said the female category is still dominant, maintaining the lead with 8,129 and men with 5,927.
But while great emphasis is being placed on loans, IPED also provides managerial, technical, counselling, accounting and training for the entrepreneurs, Persaud said.
It has also formed alliances in the globalised world of information technology, while extending its outreach services to hinterland locations such as the Rupununi, Mabura, Kwakwani, Siparuta, Pomeroon and Mahdia.
Testimony to the institute's superior status as a micro-finance organisation is that its services were secured by the United Nations Development Programme to set up the North Rupununi Credit and Development Centre.
Managed by IPED, the centre is preparing the ground for small scale industrialisation in due course, and, according to Persaud, is the first effective poverty reduction scheme designed to help Amerindians become self-sustaining members of their communities.
In the area of youth development, IPED has to its credit, effectively taken up the challenge thrown out by British High Commissioner, Mr Edward in 1998, to establish a Prince of Wales Youth Trust within six months.
This was accomplished in less than five months, and significantly, in February, His Royal Highness Prince of Wales visited Guyana and formally launched the Trust, known as the Guyana Youth Business Trust (GYBT). (SHIRLEY THOMAS)
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