By Mikaila Prince
GEORGETOWN, Guyana, (DPI) – As the government continues to aggressively develop its resources in the oil and gas sector, there will inevitably be a massive influx of revenues for Guyana, says the former head of the National Industrial and Commercial Investments Limited (NICIL), Winston Brassington.
Brassington said with the booming petroleum industry, assets in Guyana’s banking system will grow five-fold. He made the statement during his feature address to an American Chamber of Commerce’s (AmCham) webinar on ‘Interest rates and banking in an era of high economic growth.’
In presentation, Brassington recalled that at the end of 2020, total bank loans in Guyana totalled GY$168 billion against the GY$630 billion in assets. With the advent of oil and gas in Guyana, Brassington forecasts that total bank assets could multiply to GY$3 trillion by the end of 2030. It is against this backdrop that he believes that the interest rates for loans can be reduced from 9 to 5 percent. The former NICIL head pointed out that 5 percent is still higher than the average interest rate in the United States.
“If the bank were to double the loan to asset ratio, then total loans would increase significantly. If we look at half of the bank assets in loan, and we look at the banking system growing as it is projected to, by 2025 we can look at private sector loan advances at over $700 million,” he articulated.
Brassington called for the banking sector to innovate with the use of technology. In the US, he reminded, customers are able to make wire transfers and cash a cheque from their desks. This type of efficiency should be replicated in Guyana, noted.
“We seem to still use a lot of paper in our processes, a lot of manual requirements. The banks say that this is because of AML requirements, knowing the customer and verifying the authenticity, but I think that there is room to move to a more digital approach, a more online approach – an approach that would bring us more in line with one standing banking practice in the US,” he explained.
With the aim of creating a sustainable, reliable and equally profitable banking sector, Brassington is also encouraging dialogue between the central bank and the private sector.