IPED loans reached $669M in 2001
Bad debt provisioning to rise to 25%
Stabroek News
December 4, 2002
The Institute of Private Enterprise Development (IPED) says that it funded 4,352 medium, small and micro loans valued at $669.7M in 2001 and in the process helped create and sustain 7,113 jobs.
In his report at IPED's Annual General Meeting (AGM) at Le Meridien Pegasus Hotel on Monday, Chair-man Yesu Persaud said loans to the agricultural sector amounted to $259.7M; commercial activities accounted for $212.6M; general manufacturing, $10.5M; fishing, $21M; and mechanical/engineering, workshops and related activities, $10.5M.
The net profit generated and wages paid out by IPED loan beneficiaries was estimated at $4.6B or 4.1% of the country's Gross Domestic Product (GDP).
Total income amounted to $266M compared to $252M in 2000 but IPED's surplus of $47M was less than last year's surplus of $90M. The main reason for the decline, Persaud said, was the need to substantially increase the provision for doubtful debts, because of the slowdown of economic activities. Non-performing loans receivable in 2001 reached $194M up from $86M in 2000.
The provision for bad debts was increased from 7% to 18% of total debts in 2001 and the intention is to increase it to 25% within the next two years. In 2000, according to the accounts, $99M in bad debts was written off while the figure for 2001 was $470,099.
While in 2000, 5,455 loans were granted by IPED, last year the figure was 4,352 valued at $669.7M compared to $739.7M the previous year. The number of jobs created or sustained was also down from 9,680 to 7,113 while the administrative cost per loan rose from $14,811 in 2000 to $20,701 in 2001. The average number of jobs per loan also declined from 1.8 in 2000 to 1.6 last year.
In relation to training, Persaud said that in 2001 over 2,000 micro and small business clients received pre-disbursement training in managerial subject areas and practical field courses were also conducted.
The IPED Entrepreneurial Development and Training Centre is now located in the new wing of the IPED building and the intention is to train not only IPED's own entrepreneurs but also non-IPED clients for a reasonable fee.
Tracing the development of IPED, Persaud recalled that from a rented office in 1986 at 240 Camp Street, the institute acquired its own building at 253 South Road, Bourda four years later. It has since outgrown this facility and additional space was gained with the acquisition of the next door property in 1996.
With a view to improving its services to take on increasing challenges, he said IPED has now embarked on the construction of a three-storey office building at 253 South Road. This building would be serviced by a new computer network and communications system which would provide a more efficient service to small and micro-business entrepreneurs. It would also provide additional room for IPED's Business Development services and house the activities of the Guyana Youth Business Trust for which IPED provides operational and administrative support services at a cost.
Since its inception, Persaud noted that IPED has been able to train and fund thousands of small and micro-entrepreneurs, many of whom were able to transform their lives from the poorest of the poor to become self-reliant members of society. He said it was gratifying to report that 75 to 80% of the micro-entrepreneurs are women, many of whom are single parents, who are now able to maintain a reasonable standard of living.
Generally, he noted that the business environment was adversely affected by the turmoil, political protests and marches in the aftermath of the 2001 general elections. He reiterated that political and economic instability are absolutely necessary to create the confidence needed to attract and retain local and foreign investments to propel the economy and to create jobs and wealth for the people of Guyana.
According to the report of the directors, during last year, a new loan window through the International Fund for Agricultural Development (IFAD) came on stream. IFAD is now financing small and micro-business entrepreneurs in Regions Two and Three. A total of G$45.5M has been provided from June to December 2001.
Financial and technical assistance were also received from the United States Agency for International Development (USAID), the British High Commission, the Inter-American Development Bank, the Indian High Commission and the Government of Guyana/IFAD.
IPED Directors are: Chairman Persaud, Komal Samaroo, Dr Leslie Chin, Dr Ian McDonald, Laurence Farley, James Morgan and Amanda Richards.
USAID Director Mike Sarhan delivered the main address and President Bharrat Jagdeo also spoke on the occasion. Some 12 entrepreneurs were recognised for their outstanding business acumen and a number of staff were also honoured for long and dedicated service to the organisation.
