Finance Minister Defends Loans to Government Ministers and Directors

Finance Minister Dennis Cornwall is defending the Grenada Development Bank (GDB)’s decision to provide loans to government ministers and financial institution directors.

According to Cornwall, funds from the Consolidated Fund put into the GDB for sub-loans can be provided to members of the legislature, directors, and their families because there are no rules within the Bank’s operations that restrict the Bank from taking such action once it involves funds from the Central Government.

Funding Sources

The GDB is funded from two sources. The Caribbean Development Bank (CDB) is one of the entities providing funding to GDB, which is to be carried out by the agreement. In that agreement, yes, it is stated that a minister or politician should not utilize funds placed in GDB, but the rules governing the Bank never said so about funds from government.

Opposition Leader Condemns Decision

Opposition Leader Dr Keith Mitchell has condemned the GDB’s decision to sub-loan funds contrary to section five of its constitution. One director who was appointed following the June 2022 general election has confirmed receiving a loan from the Bank.

Legislation

Section 5 of the GDB legislation states, “The Bank shall not make sub-loans out of the proceeds of the loan to a director of the Bank, to a member of the Legislature of the State of Grenada or any company controlled by any such director or member of the Legislature or to the close relatives of any such director or member of the Legislature.”

Conclusion

The Finance Minister believes that the GDB was created to provide small and medium businesses with funding to ensure that they can carry on their business. It does not say that government officials cannot borrow money from GDB. Government from time to time put local revenue in the GDB for lending to the populace, and there is no restriction on that as far as he is concerned.

Frequently Asked Questions

Q: Why did the Finance Minister defend the GDB’s decision to provide loans to government ministers and directors?
A: The Finance Minister defended the decision because there are no rules within the Bank’s operations that restrict the Bank from taking such action once it involves funds from the Central Government.

Q: Who has condemned the GDB’s decision?
A: Opposition Leader Dr Keith Mitchell has condemned the GDB’s decision to sub-loan funds contrary to section five of its constitution.

Q: What is section five of the GDB legislation?
A: Section five of the GDB legislation states that the Bank shall not make sub-loans out of the proceeds of the loan to a director of the Bank, to a member of the Legislature of the State of Grenada or any company controlled by any such director or member of the Legislature or to the close relatives of any such director or member of the Legislature.