DBJ Confident Venture Capital Programme Will Be Sustainable

Officials of the Development Bank of Jamaica (DBJ) are confident that current efforts, led by the institution, to establish a sustainable venture capital industry, will be successful.

This optimism is based on what DBJ Chairman, Joseph Matalon, and Managing Director, Milverton Reynolds, say is a more in-depth approach to incorporating targeted stakeholders in the process.

The Jamaica Venture Capital Programme (JVCP) is a Government of Jamaica (GoJ) initiative, aimed at developing the environment to mobilize long term equity funding to enable greater access to alternative financing sources for high potential, small and medium size (SME) enterprises, and entrepreneurs.

Its implementation, being embarked on over the next three years, is being made possible through a technical co-operation agreement, signed by the DBJ and the Inter-American Development Bank (IDB), in February this year.

The agreement sees the IDB providing some $14 million (approximately US$150,000) in grant financing under its Multilateral Investment Fund (MIF) facility, with the DBJ is putting up counterpart funding totalling $12 million (approximately US$128,000).

Speaking on August 14 at a media briefing, held at the DBJ’s New Kingston offices to announce plans for the first ever Jamaica venture capital conference in September at the Jamaica Pegasus Hotel, where the initiative will also be launched, Mr. Matalon noted that past efforts at implementing the programme have, to some extent, been successful.

“These have really focused on the demand side and the funding side, without necessarily taking the kind of in-depth approach of (creating) the ecosystem,” he said.

“That would involve things like sensitizing the investment community on the venture capital industry and the asset class, and providing opportunities for training of venture capital investment managers. It would involve, on the other end of the spectrum, a programme which would include the preparation of potential investees to be in a position to qualify for (inputs from) a typical venture capital fund,” he said.

The Chairman, while noting the extent of public sector efforts and inputs, argued that these “have not been sufficiently grounded in the private sector.”

“I think that the Venture Capital industry represents an important plank in the thrust to grow the Jamaican economy, and all stakeholders, whether public or private, will be called on, in the course of this programme, to play their part,” Mr. Matalon said.

Meanwhile, Manager and Consultant/Co-ordinator of the JVCP, Audrey Richards, said the market review and assessment conducted for the current effort to establish the programme revealed “a lot of interest” by stakeholders, inclusive of entrepreneurs and fund managers. She pointed out that in some instances, they did not fully understand what the process entails or what is required or expected of each stakeholder.

“So, what we recognized (and) found is that one of the gaps, one of the elements that we have to put in the programme over the next three years, is training and capacity building for a lot of the stakeholders,” she said.

In his remarks, Mr. Reynolds said the DBJ is “quite confident” that the current approach to developing the programme will yield more sustainable results.

“It will, indeed, be more inclusive of the kinds and quality of participants, for both investors and beneficiaries, and most importantly, we expect that this programme will be sustainable. We are doing this programme as part of the Development Bank of Jamaica’s mandate to facilitate economic growth and development in Jamaica,” he stated.