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By Kiana WilburgGuyana’s microfinance sector, although small, has played a significant role in improving the living standards of those who have access to its services. Over the years, it has also shown that it can provide investment opportunities for the working poor, who have conventionally been incapable of access to the formal financial market.Micro-financing refers to the activity of providing a broad range of financial services to low-income clients who lack access to the formal financial institutions. These financial services include very small loans (microcredit), savings, insurance and payment services. Access to credit is seen as an important step in improving a household’s welfare; hence, it helps in breaking the cycle of poverty on their own terms.Based on its performance, which is monitored by the Bank of Guyana,Wholesale UK NBA Jerseys, the sector continues to prove that it has great potential to reduce poverty in Guyana.PERFORMANCE FOR 2014As of June 2014, there were two entities in the microfinance sector: The Institute of Private Enterprise Development (IPED) and Small Business Development Finance Trust (SBDFT).IPED happens to be oldest and the largest micro-financing institution in Guyana. It is registered as a non-profit limited liability company and is exempt from corporation tax. All donations to this company are exempt from income tax. IPED, according to the Governor of the Bank of Guyana, Dr. Gobind Ganga, is the only microfinance institution in Guyana which covers all of the country’s administrative regions.Dr. Ganga said that SBDFT was launched in November 2002,Wholesale Jerseys Free Shipping, with locally generated funds of about $12 million,Cheap Jerseys Free Shipping, which were then supplemented by support from the government of Guyana, Canada, United Kingdom, and a loan from one of the commercial banks.He said that SBDFT is a tax-exempt non-profit institution. SBDFT provides four types of loans: micro, developmental, consumer, and housing. Micro and consumer loans are payable in six months and developmental and housing loans, within two years.The Central Bank Governor said that the security required for the micro and consumer loans are mostly moveable tangible assets. In the case of the developmental and housing loans, securities that are required are transports and land titles.According to the Central Bank, the total assets held by the two microfinance institutes amounted to $3,926 million as at the end of June 2014, a 9.3% ($401million) decline from the end of June 2013 level and 2.7% ($108 million) below the end of June 2012 level of $4,034 million. It is projected, however, to improve significantly.Loans, which represented the largest asset category, accounted for 77.3% of the sector’s total assets at the end of June 2014. The companies reported aggregate loans of $3,036million, a 13.2% ($354 million) increase when compared with the corresponding period in the previous year.The Bank of Guyana said that the portfolios of the institutions consisted mainly of microcredit and loans to Small and Medium-sized Enterprises (SMEs), which together accounted for 99.6% of total loans.It said too that loans to the SMEs totaled $2,644 million,Cheap NFL Jerseys China, and accounted for 87.1% of the sector’s aggregate loan portfolio, resulting in a 15.1% ($347 million) increase for the same period last year and 2.1% ($53 million) below the June 2012 level.Loans to the SMEs were 85.7% and 85.8% of total loans as at end of June 2013 and 2012 respectively. Microcredit, the second largest loan category, amounted to $375 million and represented 12.4% of total loans for the review period.Microcredit loans at the end of June 2014 reflected a 0.6% ($2 million) decline from the June 2013 level. During the review period,Wholesale Jerseys Free Shipping, the total number of loans granted stood at 3,475 compared with 764 for the corresponding period in 2013. The increase in the number of loans disbursed, contributed to an increase in the number of jobs created. The share of loans to men, women and couples were 60.4%, 38.7% and 0.9% respectively.Total liabilities of the microfinance sector as at end of June 2014 amounted to $940 million. Borrowings from local financial institutions of $696 million, as at end of June 2014,NFL Jerseys Wholesale, accounted for 74.1% of total liabilities. Borrowings from local financial institutions to total liabilities were 69.0% and 71.7% as at the end of June 2013 and the end of June 2012 respectively.Additionally, capital and reserves amounted to $2,986 million at the end of June 2014. Retained earnings and undistributed profits grew by 14.3% and 17.3% respectively when compared with the corresponding period in 2013.The micro finance sector’s major source of funding was that of interest income, which amounted to $300 million and accounted for 81.9% of total operating income as at the end of June 2014. Further, interest income increased by 38.7% when compared with the corresponding period for 2013. Other income of G$66 million represented 18.1% of operating income as at end of June 2014.Interest expense and other expenses, which amounted to $17 million and $214million respectively, represented 7.3% and 92.7% of total operating expenses. The net income of the sector amounted to $135 million as at the end of June 2014, an increase of 17.2% when compared with the end of June 2013.To be continued …