Finance Minister Dr. Ashni Singh is encouraging Guyana’s banking sector to step beyond its traditionally conservative lending practices and support the country’s private sector by embracing other forms of collateral.Speaking during the second day of a Jamaican export and investment mission to Guyana, Dr. Singh addressed concerns raised about banks requiring only land or other fixed assets as collateral for loans.“The banking sector has historically been conservative, I am choosing my words carefully, erring on the side of risk aversion which is not necessarily a bad thing because we want strong banks and strong balance sheets and we want them to maintain good quality portfolios.“But there is room, I believe, for the banking sector to be more aggressive I believe, in relation to lending to the Guyanese private sector,” Dr Singh stated.He further revealed that conversations are also ongoing on what the banks can do and what is needed from the government to enable them to be more aggressive.According to Dr Singh, the government has already taken policy steps to facilitate change in the banking sector like enacting legislation that allows movable collateral to be used as security for loans. This means that assets such as equipment, inventory, and even vehicles can now be legally pledged to access financing.“We are working with the sector as well to enable them to accept more financial assets like receivables that can be pledged, invoices that can be discounted which is standard technology in more sophisticated banking systems, and some banks are doing this,” Dr. Singh said.He added, “We want to see more take up of this so the legal framework is in place, the banks now need to respond to that framework, legally and regulatory framework and step out a little bit from their historic comfort zone which is almost risk free lending, lending secure banking.”Highlighting Guyana’s rapid economic transformation, Singh said the government is also working with banks to improve the ease with which businesses can assess financing.He further stated with the country’s push to build a more diversified and resilient non-oil economy, improving access to credit will enable the private sector to scale up.The post Finance Minister urges banks to step out from ‘comfort zone’ & expand lending appeared first on News Room Guyana.