RATING DRIVERS
Supporting Factors
- Long established player with strong brand equity and good market position
- History of profitable operations supported by healthy net interest spreads
- Good capitalization and liquidity levels
- Risk management framework supported by oversight from an independent Board of Directors
- Strong macroeconomic prospects for Guyana are expected to support IPED’s growth
Constraining Factors
- IPED operates in a single line of business in Guyana which is exposed to climate related risks
- Below average asset quality levels
Rating Sensitivity Factors
Factors that could, individually or collectively lead to an improvement of the ratings and/ or outlook include:
- An improvement in the credit risk profile of the Government of Guyana
- Improved ROA and ROE > 4.5% and 5.5% respectively sustained for more 2 years
- An improvement in Gross NPLs/Gross Loans to < 7.5%
Factors that could, individually or collectively lead to a lowering of the ratings and/ or outlook include:
- A deterioration in the credit risk profile of the Government of Guyana
- A deterioration of ROA and ROE < 1.5% and 2% respectively sustained for 2 financial periods
- A deterioration in IPED’s Gross NPLs/Gross Loans ratio to > 20%
- Written off loans exceeds GY$100 million in any financial year
- Deterioration in the Company’s leverage ratio (Debt/TNW) to 2.5 times or more
COMPANY BACKGROUND
The Institute of Private Enterprise Development Limited (IPED or the Company), located in Georgetown, Guyana, commenced operations in 1985. The Company was originally called the Institute of Small Enterprise Development, however, as its operations expanded, the name was changed to IPED in 1991. IPED was founded by Dr. Yesu Persaud and Mr. Wilfred Stoll to reduce unemployment[1] and improve livelihoods by building sustainable micro and small enterprises. The initial capital of GY$0.5 million for the Company was provided through a grant from the Pan American Development Foundation, with the founders matching this grant with their funds. Additionally, support for start-up operations was also provided by the Foundation for International Training.
IPED is registered as a non-profit, non-governmental organization with its key objectives being the provision of business guidance, technical assistance, training and financing to micro and small businesses which enables them to build sustainable enterprises. The Company provides its range of services to several sectors across Guyana. The Company is recognized as an Institution of National Character[2]and is therefore tax-exempted.
Analytical Contacts:
Maxwell Gooding
Tel: 1-868-627-8879 Ext. 235
E-mail: [email protected]
Keith Hamlet
Tel: 1-868-627-8879 Ext. 244
Mobile: 1-868-487-8356
E-mail: [email protected]
Website: www.caricris.com
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