MICROFINANCE STORY: Small Business Development Finance Trust (SBDFT) of Guyana Provides Over 540 Microfinance Loans Equivalent to $711,046

According to the Starbroek News, the Small Business Development Finance Trust (SBDFT) of Guyana reported that it had funded over 540 micro and small loans to the value GYD 147.2 million (equivalent to USD 711,046) in 2008. SBDFT was created in 2002 with the objective to provide financial and advisory services to low income households in Guyana. Starbroek News reported that in the Trust’s Annual Report, it stated an accumulated surplus equivalent to USD 179,638 as of December 2008 compared with USD 146,801 at the end of 2007.

The International Finance Corporation (IFC), a member of the World Bank Group, earlier approved a loan to SBDFT in April 2009 in the form of a senior convertible loan of USD 300,000. The Guyana Chronicle reported this would be a two- year project. Investment Manager for the IFC, Adel Meer pointed out that the loan was being viewed as an investment, and said that the IFC was working with the management and clients of the SBDFT towards formalizing its operations. Mr. Meer also suggested that the SDBFT may want to decrease the size of the loans it gives so that more people could have access. As stated in the IFC’s Summary of Proposed Investment, the Trust’s average loan size is approximately USD 900, and the IFC’s financing is expected to enable SBDFT to provide over 2,000 loans during the life of the project. As Managing Director of SBDFT, Manjula Brijmohan explained, the loan would enable the Trust to meet the demand of more clients. According to a working paper by the Inter-American Development Bank, there are approximately 22,000 micro and small businesses operating in Guyana. The CIA World Factbook states that the population of Guyana is 772,298.

The SBDFT is a non-profit organization established in 2002 and based in Guyana. As an NGO, it has no shareholders. It offers micro, housing, consumer and development loans to those in Guyana. As noted by the IFC, SBDFT has grown its operations using donations followed by the rotation of cash generated from its portfolio to grow. SBDFT does not currently report to the MIX Market, the microfinance information clearinghouse.

Created in 1956, the IFC seeks to foster sustainable economic growth by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. The IFC provides investments and advisory services to build the private sector in developing countries. As reported in a previous MicroCapital story, the IFC invested USD 513.8 million in micro, small, and medium enterprise (MSME) initiatives, and provided USD 840,000 worth of advisory services in 2008. To read more about the IFC’s investments on MicroCapital, please see here.