The Inter-American Development Bank (IDB) will funnel US$5 million to Guyana as a policy-based loan to shore up that country's financial sector.

The IDB said the funds would facilitate 'competitiveness' programmes to increase access to financial services for the South American country of 790,000 people, and macroeconomic stability, under the four-year Country Strategy for Guyana 2009-2012.

The current loan is the second of a three-tier programme that is pumping up to US$15 million into the country.

Half of the current loan is repayable in 30 years, with six years of grace, the rest which will come from the IDB's concessionary Fund for Special Operations, is for 40 years.

The loan is priced at 0.25 per cent.

The new funds will "support measures to improve supervision of the Bank of Guyana (BOG), enhance transparency and boost the payment system's efficiency," said a statement from the IDB at the loan's approval by its board of governors.

"Moreover, the financing will also support measures to curb money laundering while promoting increased access to credit and other financial services for firms and individuals in order to foster the development of productive economic activities."

Already, Guyana has passed a law on money laundering and financing of terrorism, and set up a Financial Intelligence Unit, financed from the first loan.

Under consideration is legislation to create a credit bureau, sharing information among supervisory agencies and to bring the New Building Society under BOG supervision.

"The third operation will see the conclusion of some of these reforms which would make the financial sector more resilient to both internal and external pressures and, at the same time, more responsive to the evolving financial needs of the Guyanese private sector and public in general," said IDB.

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