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Venture Fund Sees Loan Repayments Drop 16%

By YOURI KEMP

Tribune Business Reporter

kemp@tribunemedia.net

The Government-sponsored venture capital fund has seen loan repayment sums fall by up to 16 percent due to the COVID-19 pandemic's devastating impact on clients who received debt financing.

Michael Cunningham, the Bahamas Entrepreneurial Venture Fund's (BEVF) chairman, speaking on a Bahamas Business Outlook conference panel, said: “When reviewing the venture fund's portfolio, the following was observed. Loan repayments fell to between 84 percent to 97 percent of the monthly required payment.

"That is, for every $1 that you are required to receive [in loan repayments] pre-pandemic period, we receive less than 84 cents. Twenty-three percent of the portfolio requested monthly repayments to be deferred, and 15 percent continued to make monthly payments. Sixty-two percent of our portfolio that were under the debt programme decided just about to make any payment and made no communication with the fund.”

Mr Cunningham added: “The fund’s portfolio, under the Government’s Business Continuity Loan programme, as of Thursday just 38 percent have started to make repayments, which is a good sign of the level of confidence and strong determination that these companies have to survive.” He added that 23 percent were directly impacted by the tourist market and are not in a position to begin repaying yet.

Davinia Grant, the Small Business Development Centre’s (SBDC) executive director, said she is aiming to support businesses in Grand Bahama and Abaco for another year. Up to $1.5m in grants have already been given to these islands.

She added that the Business Continuity Loan was one of COVID-19's largest financing efforts. This was said to have had a “significant impact” on small businesses. Of the entire $85m lending portfolio channelled through the SBDC, some $65m was spent with Bahamian vendors.

Turning to the SBDC's grant funding initiatives, Ms Grant said more than 900 persons had applied, but only 256 grants were awarded. In the second round, some 3,000 persons applied, but only 200 may receive awards.

Ms Grant said the SBDC had started its “fishing and farming” grant programme over Christmas, while “pre-school grants” will be upcoming in 2021.

Dave Smith, the Bahamas Development Bank's (BDB) managing director, said the BDB has set aside $25m for lending and was looking to be “very active” in 2021.

He added: “The focus of these monies is really geared toward the orange, green and blue economies. What that means is projects and interest in those specific areas automatically gain a certain level of preference, because that's the focus of the bank at this particular time, certainly for the period 2020 to 2024.”

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