State-run debt recovery unit seeking to recover $billions in Guyana National Cooperative Bank Loans
Stabroek News
April 20, 2007
Stabroek Business has learnt that government is moving apace to "wind up" the settlement of billions of dollars in unrepaid loans to businessmen by the now defunct Guyana National Cooperative Bank (GNCB).
Established in 1970 under the Forbes Burnham administration the GNCB, the country's first indigenous commercial bank, served as the primary vehicle for providing funds for the establishment of a number of business enterprises, principally in the manufacturing and commercial sectors, and contributed to the growth of the contemporary business sector.
Over the years several businesses that secured loans from the GNCB went into decline or collapsed altogether leaving the institution saddled with billions of dollars in unpaid debts.
Stabroek Business understands that government is currently interfacing with the bank's debtors through a state institution known as the Guyana Cooperative Financial Services which is charged with ensuring debt recovery and, in some cases, overseeing debt write-offs. While engagements with debtors have, in some instances, led to court action, Stabroek Business has been informed that the policy of the debt recovery unit favours negotiations that would lead to suitable terms for the repayment of the debts.
Businessmen with outstanding debts to the GNCB have reportedly been meeting with officials of the Guyana Cooperative Financial Services and have been seeking a waiver of interest on the debts which, in most cases due to the accumulation of interest, amounts to several times more than the borrowed sum. Stabroek Business understands that settlement arrangements include debt write-offs primarily to the rice sector. The debt recovery unit is being managed by Keith Burrowes who replaced current Minister of Culture, Youth and Sports Dr. Frank Anthony as Head of the Health Sector Development Unit.
Stabroek Business understands that government is seeking to retain the Guyana Cooperative Financial Services beyond its present assignment and that in the future it will provide more general debt recovery services on behalf of the government.