On January 2, 1998 Enterprise Growth Fund Limited (EGFL) commenced operations with a mandate to provide venture capital to the Small and Medium-size Enterprise (SME) sector.
Our aim then was to become a minority investor and a value-added partner to dynamic enterprises with significant potential for growth and development.
Within a few years of EGFL’s existence, it became apparent that local entrepreneurs did not have a strong appetite for venture capital financing alone. In response to market demands, EGFL was repositioned as a Fund Manager offering loans from dedicated, sector-specific Funds. Additionally, EGFL started lending from its own account in 2004.
These developments have enabled EGFL to cater to a wider cross-section of businesses and have allowed it to fulfill its revised mandate of providing development finance to the critical SMEs in agriculture, manufacturing, tourism and renewable energy sectors with export potential.
The Creation of EGFL
As a condition of its Investment Sector Loan to the Government of Barbados, the Inter-American Development Bank mandated that the Barbados Development Bank (BDB) be terminated because of the significant cumulative losses incurred from its inception.
To this end, a study was commissioned by the BDB to determine the appropriate legislative, regulatory and fiscal framework under which a new Development Finance Institution could efficiently provide growth-financing for businesses in the small and medium sized enterprise sector. The study concluded that the establishment of a new Development Financial institution was necessary to replace the BDB, but that the role of Government in its governance should be limited.