Claims of political bias affecting the distribution of a fund which aims to give aspiring entrepreneurs a leg-up have been rebuffed.
Garfield Joseph, director of the Prime Minister’s Entrepreneurial Development Programme (EDP), has denied that favourable treatment or political interference have played a role in the lukewarm response to the programme launched last May.
Nine months on, just $1 million of the $5 million allocated to capitalise the EDP has been utilised.
The EDP was designed to fund existing and would-be business owners in Antigua and Barbuda.
The director sought to remove the idea of any possible interference by members of the board with the ‘final say’ on the approvals of the fund’s loan applications.
“Not a single loan that has gone to the Cabinet has been rejected,” said Joseph.
The director went on to say that Cabinet members not only approved the loans in all instances but, in some cases, even went above the prescribed mandate.
Under the EDF, the maximum loan to any one entrepreneur is set at $75,000. Joseph said that, in many instances, the Cabinet went above this to meet the needs as outlined in the applicant’s business plan.
The “most important” of safeguards against Cabinet bias or interference, Joseph said, was that the Cabinet members only received what he termed as a “summary form”.
Joseph explained that, with this form, the Cabinet only has to consider two factors.
“What are the top factors for recommending the loan and, secondly, what is the level of risk that we associate with this [loan],” he explained.
“There is no politics in the way. The Cabinet folks are very busy. We get a number of these applications and they are not going through every business plan to see who owns this or that because what we send to them is a summary form,” he added.
The director revealed that over 200 persons had visited the department to collect application forms, but only around 50 of those persons submitted completed forms over the nine-month period.
He said 60 percent of approved applications are to aid in the creation of new business start-ups.
Joseph said that part of the problem for the low subscription to date is due to a misunderstanding over the terms of the agreement.
“Many persons came in thinking that it was a grant and not a loan… we are trying to build capacity and sustainability at the same time. It is a loan and we want to make it easy and fast,” Joseph explained.
The application process was another barrier that the director identified as a reason for the low volume of subscriptions.
“When we [reviewed] the form, there were a lot of requirements that seem to be onerous. We have since listened and responded to the persons who we interact with.”
As a result of this review, the department has since simplified the application form, removing the onerous conditions.
Lastly, Joseph said one of the major hindrances found by people applying was that of the business plan requirement.
“I’m delighted to say, that for the 2020 loans, those are no longer required because we actually do [the business plan] for the person who comes in in real time,” Joseph informed.
The EDP is a part of the government’s $12 million economic assistance programme that includes a Home Improvement Fund (HIF) of $5 million and an Agricultural Payment Fund (APF) of $2 million.
All of these programmes, the Cabinet admitted last week, have been under-subscribed.