The Government of Guyana has announced measures geared towards easing the financial burden on citizens in the wake of the COVID-19 pandemic.
In an address to the nation on Wednesday, August 19, newly appointed President, Dr Irfaan Ali said an agreement has been reached with the local banking sector to extend the moratorium on loan payments until the end of the year and to cut interest rates.
This means that customers with mortgages and other loans will be spared the financial burden of servicing these loans, and in turn, loans will not be classified as non-performing, in an effort to ensure that they do not default.
“Commercial banks agreed to offer general concessional reductions of interest rates of one per cent and up to two per cent on customer loans below GUY$10 Million until December 30, 2020. The existing lending rate ranges between 6.5 per cent and 16 per cent. Some commercial banks have agreed to apply special treatment to the interest accrued during the moratorium period,” he said.
“Commercial banks have agreed to waive all bank charges, including ATM and merchant bank charges to encourage more out-of-bank transactions, as well as charges for transactions by senior citizens,” the president added that these measures will not impact the soundness of the banking sector.
Ali also announced that the Bank of Guyana will relax certain requirements that would allow Banks to cushion their losses and increase liquidity by GUY$9.4 billion.
These requirements are set out in the 13 guidelines that the Bank uses to regulate financial institutions.
“Commercial banks agreed to offer general concessional reductions of interest rates of one per cent and up to two per cent on customer loans…”– President of Guyana Irfaan Ali
The president also announced that commercial banks agreed to continue supporting businesses with short-term capital needs.
This will allow the businesses to meet payroll, remain open, and keep their staff employed during the tough economic times accompanying COVID-19.
He revealed that the Government is securing US$60M to fund various aspects of its response to COVID-19.
The money is being sourced from the World Bank, OPEC Fund for International Development (OFID), Inter-American Development Bank (IDB), and the Islamic Development Bank.
In March, after the country recorded its first case of the virus, commercial banks had agreed to deferring loan payments and reducing interest rates on loans.
However, most of those initiatives were initially set for three months.