New financial institution to help small business
Guyana Chronicle
August 12, 2004
THE Multilateral Investment Fund (MIF) has announced the approval of US$2.9M in financing to support the launching of a new financial institution that will provide commercial credit to micro, small and medium-sized enterprises in Guyana and Suriname.
The Inter-American Development Bank (IDB) which administers the fund, said Development Finance Limited South America Ltd. (DFLSA) will receive a $2.5M MIF loan, repayable over eight years, and a $335,000 grant for technical assistance to enable the new financial institution to assist in developing and expanding small and medium-sized enterprises, especially regarding international competitiveness and good corporate governance.
Together with the European Investment Bank, another major investor in DFLSA, the MIF will take the role of lead financier in this initiative, allowing DFLSA to establish a needed operational track record and develop the necessary critical mass of lending to make it sustainable, the IDB said in a press release.
The IDB expects that in five years DFLSA will support the development and expansion of 50 small and medium-sized enterprises in Guyana and Suriname and will also be in a position to issue bonds in local capital markets. DFLSA will provide medium and long-term financing, as well as technical assistance, to SMEs in mostly the manufacturing, agro-processing, and industrial and commercial services sectors.
The bank said DFLSA is a subsidiary of DFL Caribbean, a Trinidad and Tobago financial institution with an international long-term credit rating of BB.
DFLSA will be a Limited Liability Company incorporated in Guyana and regulated by the Bank of Guyana under the Financial Institutions Act.
Its headquarters will be located in Georgetown, Guyana, and it will operate in Suriname through a branch office.
The MIF is an autonomous fund, administered by the IDB, that provides grants, investments and loans to promote private sector growth, labour force training, and small enterprise modernisation in Latin America and the Caribbean.