Close to half of the $2 million allocated to the Venture Capital Fund has been used, leaving its administrators to find additional funding from the government in the upcoming budgetary period.
According to Parliamentary Secretary in the Ministry of Finance, Michael Halkitis, while there has been some success in reviewing a lot of projects and financing a few, the Fund’s administrators are hoping to do more with the help of more money.
“We have $2 million already, but that’s a very small amount in the scheme of things. But we thought that we would start small, get all the administrative procedures in place and establish a track record of operations,” Mr. Halkitis said during an interview with The Bahama Journal.
“Over the past two budgetary periods, we have asked for $1 million each time. I think maybe this time we will perhaps ask for $2 million. I think as far as things have gone so far, we are in a good position to say to the government, we have made inroads and we should have access to more money.”
PLP Senator Dr. Bernard Nottage made a similar point in the Upper Chamber on Wednesday. At the time, he questioned whether the Fund’s initial allocation of $1 million was enough in the first place.
“If you under fund it you cannot expect much to come out of it,” he said.
“So we have got to look at that. We have got to look at where the venture capital funding is going to come from. We have to make sure it is available. And we have to make sure that our entrepreneurs and potential entrepreneurs are positioned to be able to access the advantages which they are supposed to be provided with.”
The Venture Capital Fund offers entrepreneurs or would-be entrepreneurs the opportunity to begin or expand their businesses by making funds available through loans.
It also takes up small equity positions and as businesses expand, the equity can be purchased by entrepreneurs or sold to others with their agreement. The proceeds from the sale would then be used to build up the Fund.
According to Mr. Halkitis, since its establishment several months ago, the Fund has taken up equity positions in six companies ranging from construction consulting to Internet retailing and navigation to security, translating into a total contribution of an estimated $500,000.
This means that the Fund has bought shares in several local companies.
It is anticipated that as each of the companies grow, so would the Fund’s investment.
Mr. Halkitis said the Fund has also authorised 12 loans for various projects, such as a storage facility, pharmaceutical supplies, jewellery manufacture and business consultancy, among others, in the amount of just over $400,000, leaving the Fund with a balance of $1 million.
“We really wanted to fund projects that brought some innovation, created employment and those that we thought would be really viable going forward,” the parliamentary secretary explained.
“But after the initial launch, we don’t really have that very same volume.”
Fund administrators are expected to soon travel to Grand Bahama to further educate the public.
“In future, we will be going to quite a few of the other islands as well, sensitising members of the public in terms of what is available,” Mr. Halkitis explained.
“We have also put together a group of business consultants who would offer advice to some of these companies. So, we have been encouraged by what we have been able to do so far-. We are also hoping to eventually graduate from financing small projects to partner with larger developments.”
The government’s new legislative agenda places much emphasis on entrepreneurial development with the aim of providing incentives and concessions for the more rapid development of Bahamian entrepreneurial talent.
This was essentially the idea behind a new Domestic Investment Board that is aimed at cutting red tape for Bahamian investors.
The government says small businesses will also be supported by enhancing the relationship between the Development Bank, BAIC [Bahamas Agriculture Industrial Corporation], the various government loan guarantee programmes, the Venture Capital Fund and the Board.
By: Macushla N. Pinder, The Bahama Journal
