Higher-level grade students and young prospective businesspersons on island are being offered an opportunity to become young entrepreneurs – through a Youth Enterprises Equity Fund [YEEF] – established by the St Lucia Development Bank (SLDB).
The SLDB initiative is geared towards assisting students that encounter financial difficulties to pay their academic tuition fees, and also to assist persons looking to pursue business ventures through YEEF.
The YEEF initiative, which was established in 2010, sets out to invest in start-ups and offers students up to $50,000 to advance their businesses.
In an inclusive with THE VOICE, SLDB Development and Marketing Manager and Corporate Secretary , Philbert Francis spoke about how the YEEF was conceptualized and the merits and benefits of this exercise.
“YEEF was conceptualized based on a number of realities at the time …as there was an unprecedented rate of youth unemployment,” Francis explained.
He said statistics revealed that the figure hovered around 34 % at the time. Added to that, he noted, there was a tightening of the credit environment particularly in relation to ‘seed financing’ and the youth generally, “do not have collateral to provide (security) if they are seeking loans”.
Francis stressed that there was also the need “to harness the talent and creativity of the young people, in order to nurture a new business or to nurture them into the business environment.”
The age range to access funding from the facility is for young people from 18 to 35 years. He added: “The fund is created to provide ‘Venture Capital’ …meaning that the bank can invest up to $50,000 in the enterprise.”
The SLDB’s loan funding arrangement comes with conditions laid out to help young business-minded persons achieve their goals. Firstly, the applicant must register the business and this is done through the assistance provided by the Small Business Development Centre (SBDC), who work in tandem with the SLDB.
In addition to helping applicants register their business, the SBDC also provides assistance in getting young persons to develop a ‘Business Plan’. Subsequently, the young person has to submit a business plan proposal to the SLDB; and then the business plan is reviewed before the final analysis to determine whether it is a feasible undertaking that can be pursued.
Francis said the SLDB further stipulates that the business plan must also entail providing employment for at least three persons. “So if the venture is successful …out of the information that the young or aspiring entrepreneur presents to us, and we now present a proposal that goes to the Board of directors of the YEEF and if they approve the venture, then the bank will invest up to 50,000 in the business.”
Also, he said, “the new business enterprise is entitled to duty free (concessions) for the importation of raw materials and equipment and so on, which they need to run the business. And also, they are exempted from paying corporate taxes on profit generated from the business.”
The SLDB official said the entity through its loan arrangement purchase shares in the business enterprise “and they can buy back the shares within seven years”.
Added Francis: “We anticipate that with all the support that is given to the young entrepreneur that the business is going to grow …and we are saying that, by the seventh year, the business should be in a position to come back and buy the shares which the SLDB had.”
He said by that time, the young business enterprise would be in a position to go on its own. The SLDB also provides support for the young entrepreneur “to help them and to give them guidance and things of that nature.”
Last Wednesday, the SLDB put on a display at the Sir Arthur Lewis Community College [SALCC] compound to enlighten young persons about the merits of the equity fund.
Francis stated the entity is aware that there are some students desirous of starting their own business, and may want to pursue courses at the SALCC in areas, such as auto mechanics, refrigeration, electronics and other fields. “And so, we are also offering the students here, the opportunity to participate in our Youth Enterprises Equity Fund,” he noted.
He added, “All that is expected is for the young entrepreneur to manage and run the business properly.”
Francis told THE VOICE that the SLDB shares good relations with the SALCC, by providing loans for young persons “to educate themselves”. Also, upon graduating from the SALCC, the SLDB helps those students to access fund to pursue a first degree in their respective fields “by funding for their degree programs and if they want to go outside of Saint Lucia to study and otherwise.”
Francis says the YEEF initiative plays a critical role and helps “bridge that gap” to assist young persons that may not have the requisite collateral needed to access loans from financial entities.
Since the funding initiative was conceptualized, there has been some success stories and as well incidents of persons not living up to their full potential in managing their respective business enterprises.
Said Francis : “The level of success is not what we anticipate …because when you start a business there are challenges and it is not always a ‘bed of roses’ and we do find some of those young persons that give up very easily.”
However, the business development officer advised prospective young business persons to be wary of the challenges ahead, and do not lose hope with their pursuits. “Young persons have to understand that when you are in business you need to keep your financial records, because your decisions have to be premised on the data that you have,” noted Francis.
He says young people need to be more resilient and not give up too easily, since “they don’t keep the financial records and so, they can’t make decisions one way or the other.”
Nevertheless, he admits, there are young business persons that are operating successfully “and the future is bright and we are at the moment looking for ways to enhance the facility and we have discussed a few ideas to enhance it.”
In the long run, declared Francis, the entity would be making some announcements in the near future , and “in terms of that …we are going to restructure and perhaps at this juncture there is need for us to revamp it and see how best we can make it suit the needs of the young people , at this time.”
Highlighting some of the achievements by young entrepreneurs, Francis reported that an individual has opened up a recording studio, while others have ventured into the field of manufacturing health products, and manufacturing cassava flour.
With emphasis on food security and wanting young persons to focus on a different perspective to livelihoods in the agricultural field, Francis adds that “agriculture is one of the areas that is open to the programme also …and we have funded one of the young persons to (facilitate) the export of agricultural produce.”
The SLDB team has taken the YEEF initiative to the wider community to drum up interest in the equity fund.
As the funding project begins to pick up steam, Francis asserted: “With the revamping of the whole programme …we make presentations to a number of groups within the communities and though there is a need for more of it, but some of that has been done and we will continue to do.”
Your email address will not be published.
About Author
