While the law governing the Guyana Development Bank paves the way for funding to be provided for small and medium-sized enterprises (SME), it has key measures in place to protect against fraudulent applications and abuse of the institution’s finances.
According to Guyana Development Bank Act, it is an offence for a person to knowingly provide false or misleading information to the bank, obstruct its work, falsify or destroy records, improperly disclose confidential information, or wilfully misuse the bank’s funds, property or assets.
“A person who commits an offence under subsection (1) is liable on summary conviction to a fine of not less than $5 million and not more than $10 million,” the law states.
The legislation also extends liability to corporate officers.
“Where an offence committed by a company is proven to have occurred with the consent or connivance of, or because of the neglect of a director, manager, secretary or similar officer, that individual can also be held personally liable and face the same penalties.”
Such an offence attracts a fine of not less than $5 million and not more than $10 million dollars.
The accountability provisions come as the government prepares to establish the Development Bank as a source of financing for SMEs that often struggle to access credit from commercial banks.
The bank is expected to offer zero-interest loans of up to $3 million without requiring collateral.
The government has said this is intended to support entrepreneurship and expand access to financing across sectors including agriculture, manufacturing, tourism and other productive industries.
Overall, the offences outlined in the law are expected to discourage fraudulent loan applications, protect the bank’s financial resources and strengthen public confidence in the institution as it begins operations.
The Finance Minister has been empowered to establish regulations to govern how borrowers repay the loan and outline the penalties if they do not. This process is ongoing.