ST. GEORGE’S, Grenada, CMC—Finance Minister Dennis Cornwall is defending the Grenada Development Bank (GDB) ‘s decision to provide loans to government ministers and financial institution directors.
He said that 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.
“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,” Cornwall said.
“I think they are using a clause in one of the agreements with the bank and the CDB where it says that money put into the bank by CDB is not there for politicians to take from it; these are specific rules that were put in there,” said Cornwall.
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.
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.”
The legislation, which has been amended seven times since it was enacted in 1976, also provides for the protection of the CDB’s interests.
“The Bank shall exercise its rights about each sub-loan financed in whole or in part out of the proceeds of the loan in such a manner as to protect the interests of the Caribbean Development Bank.”
“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,” Cornwall said while explaining the Bank’s funding sources in 1976.
“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 I am concerned,” said the Finance Minister, who has oversight responsibility for the operations of the financial institution.
and then  's decision to provide loans to government){kind=link}