Why is Dolla Leaving Guyana?

While some companies are looking to get into Guyana, Dolla Financial is winding down its operations there. Hmm… I wonder why? 

So United Airlines just launched a direct flight from Houston to Guyana. But while United and others are trying to get in, Dolla is trying to get out.

Dolla opened in Guyana’s capital Georgetown back in 2021, focusing specifically on providing short-term loans to small and medium-sized businesses. And Dolla Guyana contributed consistently well to the company’s overall performance.

According to their audited financials for the year ended December 31, the Guyana operation contributed 86 million Jamaican dollars to net interest income and five million to overall net profits.

So, it raised more than a few eyebrows when the company announced it was shutting the doors on the Guyana office. According to a statement from Dolla, Guyana’s rising geopolitical tensions make doing business there very challenging and uncertain.

We’ve talked a lot about Venezuela and Guyana’s dispute over the Essequibo region. Venezuela claims the oil-rich region actually belongs to them.  They held a referendum in December where Venezuelans voted to annex Essequibo from Guyana. 

The leaders of Venezuela and Guyana met last year and agreed to resolve their issues without force, but there’s still a lot up in the air.

Dolla’s CEO, Kenroy Kerr, said the withdrawal was a strategic move to shift resources away from the uncertainty in Guyana towards more financially viable opportunities in Jamaica.

Dolla will still have a presence in Guyana for at least the next year. The company said it expects all the loans disbursed in the market to be fully repaid by March 31, 2025. 

Now, it might seem strange that Dolla is trying to get out of a market that a lot of people are trying to get into, but it’s all about timing. Dolla is a micro-lender, so geopolitical tension will have a massive impact on how they can do business. Interest rates, operational costs, and delinquencies, all of this has to be considered. 

I’m sure when the time is right, the company may consider reentering the market.  And with the connections and network they’ve built over the last two and a half years, it might not be that hard.

And that’s the bottom line.