$5 Million Squandered in 'Venture Capital Fund'
The Bahamas government-sponsored venture capital fund has been squandered in sweetheart deals for friends, family members and cronies, exhausting the $5 million that was originally allocated to finance Bahamian entrepreneurs and small businesses.
Despite having absolutely nothing to show for the funds that were allocated, Jerome Gomez, administrator of the fund and a partner at the Baker Tilly Gomez accounting firm says the annual $1 million allocation be "doubled" to meet demand.
The Bahamas Entrepreneurial Venture Fund allegedly financed two business proposals during 2010 but is now out of funds to lend, currently possessing just enough to cover administrative costs and keep the programme running.
Gomez confirmed that "all the funds for lending resources" had effectively been used up, squandered by providing financing to 52 businesses, none of which really panned out.
"When you take the administrative costs of running the fund out, all of it is out in the marketplace. We are just holding enough to keep the fund going, paying the bills," Gomez said.
Mr Gomez reporetd that of the 52 businesses financed to-date, some 41 had received loans, with 11 receiving equity injections where the Bahamas Entrepreneurial Venture Fund took an ownership stake in return for its capital investment.
From January to now, Mr Gomez said the fund had financed two projects - one a restaurant, another a sheep's tongue processing plant. Other ventures previously aided include a block manufacturing plant, an ink cartridge refill company, and a manufacturer of styrofoam products for the construction industry.
Mr Gomez admitted that while many of the firms that had been loaned money were still operating, they were having difficulty in meeting their loan repayment obligations.
The Bahamas Entrepreneurial Venture Fund can invest a maximum of $100,000 in debt financing in any one business, and a maximum of $200,000 in equity.
No public accounting of the money spent has been offered by Mr Gomez or his accounting firm.