Last week, the Economic Development and Transport Minister, asked businesspeople in North Wales to tell him exactly what sort of support they think they need if they are to flourish and grow.One of the 'suggestions' put forward in this 'consultation', was for "WAG to set up a citizens’ bank "that would look at the needs of small businesses" because, according to the Minister, the businesses which will find it most difficult to access funding will be small businesses".
Don't whisper too loud but, believe it or not, WAG is already the 100 per cent shareholder in a 'bank' to support small firms known as Finance Wales.
This organisation recently received £150 million from the Jeremie Fund to, yes you guessed it, help small firms access finance.
Perhaps if the Minister had a word in the ear of the senior managers of Finance Wales and told them to act less like a private equity house and more like a development bank funded by the public sector (as originally intended), then more money just might its way to the small firm sector in Wales.
He may also want to ask the question why an organisation funded by the Welsh Assembly Government is running a fund in the North East of England when it should be focusing its entire efforts on supporting the Welsh small business sector through the economic recession?
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In addition, they are underfunded and have to stick to strict criteria for their funding due to competition/state funding laws. They even bent the rules so that pre-start firms could access JEREMIE.
Yes, their APR is higher than the highstreet, but as anybody with an ounce of knowledge on the subject will know, they are bound by law to be that way.
Instead of kicking Finance Wales for what it does, why don't you and the Conservatives vocally support a Bank of Wales which would be fit for purpose and deliver more than Finance Wales is able?
The point I was making was that we already have funding in place for small firms in Wales, so why ask for a further 'people's bank'? JEREMIE is a great boost for Welsh business but we need to get the money out now.
As for "an ounce of knowledge on the subject" on the strict criteria under European law, you know as well as I do that Finance Wales was charging interest rates at well over 15% when the European reference rate was only 5.7% and European regulations stated that their loans only had to be 4% above this rate?
Why was this done when interest rates could have been kept lower? Some have alleged that it was to recover money lost on unsuccessful deals but you would have to ask Finance Wales that question.
If this was private bank, I could understand this approach to risk and return but this is a publicly financed organisation that is funded to fill a market gap, not to make money to bolster its balance sheet.
As one of the people who put together the original paper for a "development bank for Wales model" back in 1998 and as someone who served as one of the founder directors of Finance Wales for four years, I am deeply disappointed that Finance Wales has moved away from being a development bank on the original Canadian model to be a proto-equity fund which will probably be bought out by the managers and directors in the next couple of years.
So, perhaps we need to have a proper "Development Bank for Wales" model, as you suggest. You'll just have to wait and see what the Welsh Conservative policy will be later this year.
Finally, and you seem to have skirted around this issue, what on earth is a publicly funded "development bank for Wales" doing in the North East of England?
We are in the middle of the worst recession since 1921 and our main fund for supporting Welsh SMEs has decided to expand its operations outside of Wales?
Cynics would argue that this has nothing to do with supporting businesses in Wales - which is the sole aim of FW - and is a move to strengthen the portfolio of the business prior to its disposal? What do you think?
Are they actually 'running' the fund as you suggest, or building links with a similar scheme?
I will ask Sian next time I see her though.
Yes, according to the link on the blog, One North East made the following announcement in December:
The fund management firms leading the six funds - subject to final contract signing - that will comprise JEREMIE are:
• NorthStar Equity Investors, an active early stage fund management company established in Newcastle since 2004, who will manage the £15m Technology Proof of Concept Fund and the £20m Seed Fund.
• IP Group, which operates on a nationwide basis, who will run the £25m Technology Fund from offices in Newcastle.
• Rivers Capital Partners – a new joint venture between leading technology investment firm E-Synergy and local business advisors Finance Tree of Newcastle - who will manage the £7.5m Angel Match Fund.
• Finance Wales Investments, a specialist in regional investment, who will manage the £20m Growth Fund 500 through their new North East office.
• NEL Fund Managers, of Newcastle, who will run the £20m Growth Fund.
They have, according to this report, even opened an office in the North East of England.
Don't you think it strange that this seems to be news to everyone in the business community and that even AMs have been completely in the dark about the decision.
Certainly, Finance Wales have made no formal announcement on the subject of opening an office outside of Wales and running a new fund for another organisation.
They didnt take up the offer -as usual
Finanace Wales needs sorting and taken back to its original purpose
I have a list of sme's and new business who couldnt get support from them.These all based in Wales. yet they fund business outside of Wales
Crazy
In 20 years of dealing with entrepreneurs, I have never met someone like this so-called entrepreneur who knew all the details about finance wales, wanted to support their stance and more importantly, was ready to write a long diatribe.
Who on earth is WAG kidding? Pathetic.....
As if any businessperson in their right mind would spend time defending Finance Wales!
Well that narrows it down then - FOI time!
"Credit where credit is due".
That's the problem though, you can't get credit with Finance Wales!
"why don't you and the Conservatives...."
Of course, its all the fault of the bloody Tories the small firms aren't getting any funding!
What a clown!!!
Maybe his business is a circus!!!!
It is like writing an angry email - if you wait 24 hours and look at again, I doubt that you would send it in the same form.
But it is your blog and you are perfectly within your rights to publish what you want and reject waht you want.
If people don't like that, then they don't have to come here, do they.
p.s. I post anonymously but I haven't got a bone to pick with you but if I did, I would be decent enough to let you know who I am ;)