PROFESSOR DYLAN JONES-EVANS

Since a new chairman (Gareth Bullock) and chief executive (Giles Thornley) were appointed to head up Finance Wales, there may be positive signs that its previous intransigence towards change is slowly being eroded. However, much remains to be done given that transforming the corporate culture of any organisation – especially one that had its head stuck in the sand for far too long - will not happen overnight. This is best demonstrated by the launch earlier this week of a new £136 million Wales Business Fund to support SMEs. The good news that many have been waiting for is that Finance Wales has finally appreciated that there is a need for affordable finance to firms by reducing its lowest rate of interest for loans from eight per cent to four per cent. This is something that the access to finance review proposed time and time again only to be told by a range of senior executives within Finance Wales and many in the corporate finance world that it simply could not be done. ...

Since a new chairman and chief executive were appointed to head up Finance Wales, there are positive signs that its previous intransigence towards change is slowly being eroded. However, much remains to be done given that transforming the corporate culture of any organisation – especially one that had its head stuck in the sand for far too long - will not happen overnight. This is best demonstrated by the launch earlier this week of a new £136m Wales Business Fund to support SMEs. The good news that many have been waiting for is that Finance Wales has finally appreciated that there is a need for affordable finance to firms by reducing its lowest rate of interest for loans from 8% to 4%. This is something that the access to finance review proposed time and time again only to be told by a range of senior executives within Finance Wales and many in the corporate finance world that it simply could not be done. Now that it has taken this step and halved its cost of lending, I a...

I have been very fortunate in my career to work with some brilliant young academics who have gone to make a real impact in their field. One of these is Dr Niall Mackenzie , who joined the University of Wales from Cambridge University five years ago before leaving to go back home to a lectureship at the Hunter Centre for Entrepreneurship at Strathclyde University. Niall has been undertaking a number of research studies since he arrived back in Glasgow and possibly one of the most influential has been his analysis of the performance of Archangels, Scotland’s oldest business angel group . Business angels – those private individuals investing in unquoted companies - have received growing attention and recognition for their activities in the UK in the last 25 years. Their investments typically involve receiving equity that is reduced with further rounds of financing for investee companies. As would be expected with such transactions, angel investment involves a risk of failure but...

This year, there has been an unprecedented interest in the Wales Fast Growth 50, which has now become one of the most sought after accolades amongst Welsh businesses. In two weeks time, we will be completing the search for this year’s fastest growing firms in Wales and with a record number of number of new entries likely to be on the 2015 list, it will be yet another demonstration of the growing vitality of entrepreneurial businesses and their contribution to the Welsh economy. Given the massive contribution of growth firms to both wealth creation and employment, it is not surprising that there is a growing interest around the World in supporting the further development of these businesses. Recently, the Business Development Bank of Canada (BDC) has announced a new initiative to help “high-impact companies”. This follows a new study analyzing the management needs of high-impact firms i.e. those that are increasing their turnover by more than 20 per cent a year. One of the big...

On Wednesday this week, following a Welsh Conservative debate on access to finance for small to medium sized enterprises (SMEs), a majority of AMs in the National Assembly for Wales agreed “that Finance Wales does not fully meet the needs of small businesses across Wales and that access to finance is still a problem for many SMEs”. They also called on “the Welsh Government to establish a Welsh Development Bank as recognised in the report published by Professor Dylan Jones-Evans”. This was another step on the road to ensure that SMEs, the engine room of the Welsh economy, are given the financial support they need to grow to create further wealth, jobs and prosperity for the nation. Whilst there is some way to go, it is not as if the Welsh Government has been sitting idly by since I started the first ever review into access to finance for SMEs for the Welsh Government in 2013. At the time, a major concern expressed by a number of stakeholders interviewed was the fact that there...

16:50 Y Dirprwy Lywydd / The Deputy Presiding Officer I now call for a vote on the motion as amended. Cynnig NDM5765 fel y’i diwygiwyd: Cynnig bod Cynulliad Cenedlaethol Cymru: 1. Yn nodi nad yw Cyllid Cymru yn diwallu yn llawn anghenion busnesau bach ledled Cymru a bod mynediad at gyllid yn parhau i fod yn broblem i lawer o fusnesau bach a chanolig;  2. Yn galw ar Lywodraeth Cymru i sefydlu Banc Datblygu i Gymru, fel y cydnabyddir yn yr adroddiad a gyhoeddwyd gan yr Athro Dylan Jones-Evans; a  3. Yn galw ar Lywodraeth Cymru i ystyried rhinweddau'r cynigion a amlinellir yn 'Gweledigaeth ar gyfer Buddsoddi yng Nghymru: Buddsoddi Cymru' a, lle y bo'n briodol, ystyried eu hymgorffori yn y gefnogaeth y mae Llywodraeth Cymru yn ei rhoi i fusnesau bach a chanolig yng Nghymru. Motion NDM5765 as amended: To propose that the National Assembly for Wales: 1. Notes that Finance Wales does not fully meet the needs of small businesses across Wales and that access t...

Last week, the Development Bank for Wales Task and Finish Group published its report recommending that a new organisation be established by the Welsh Government to ensure that Welsh SMEs (small to medium sized enterprises) get access to the finance they need to grow and develop. But with many expecting high street banks to lend to small firms, why should the public sector intervene in this market place? Over the last six years, lending to SMEs has fallen as various restrictions have been imposed on, and developed by, the banking sector in the UK in response to the 2008 financial crisis and its aftermath. Whilst the UK economy has recovered during the last three years, numerous reports show that bank lending has not kept pace with the growing economy. Similar to other studies on funding SMEs, the Welsh Government’s access to finance review has detailed the continuing decline in bank lending to businesses in Wales. For example, data on bank lending to SMEs from 2011-2014 shows ...

The Development Bank for Wales feasibility study has been published today and a full copy of the report is available here . It raises key points about the methods to close the funding gap and help deliver finance to Welsh SMEs including charitable, community and social enterprises. It also raises questions about some of the principles which underpin the provision of finance and the role of government funding for SMEs in economic development. Background A Task and Finish Group was appointed by the Minister for Economy, Science and Transport in June 2014 to produce a report on the possible form, function and feasibility of a Development Bank for Wales (DBW). It identified that a number of market gaps need to be addressed in the provision of finance to Welsh SMEs and that there is a geographic bias regarding the availability of bank credit, informal investment and venture capital to businesses in Wales.  Unfortunately, the public sector response within Wales has been under...

Back in 2009, a review undertaken by Chris Rowlands - now the senior non-executive director on the board of Finance Wales - found that there was permanent finance gap for up to 5,000 UK businesses looking to raise between £2m and £10m in growth capital. Concluding that neither banks nor equity investors had the appetite or interest at the time to fill this gap in the near future, he proposed that a new fund of the order of half a billion pounds should be set up that would address this problem. In the end, it was not the UK Government but the banks that took on the challenge of establishing such a vehicle although it is not exactly what the Rowlands Review envisaged when published. In  2011, five of the UK’s main banking groups - Barclays, HSBC, Lloyds, RBS and Standard Chartered - came together to establish the Business Growth Fund (BGF) as an independent investment company with £2.5 billion to invest in fast-growing smaller and medium sized UK businesses that need long-t...

During the recent Access to Finance review which I chaired for the Welsh Government, one of the more contentious issues related to whether the interest rates being charged by Finance Wales were too high and, more importantly, whether this was restricting the availability of capital to small to medium sized enterprises (SMEs) in Wales. Certainly, plenty of strong opinions have been expressed on this issue, especially in relation to the £150million JEREMIE Fund managed by Finance Wales which is the primary mechanism used for debt and equity support for SMEs in Wales. JEREMIE is not only unique to Wales but is an initiative of the European Commission that promotes the use of financial engineering instruments to improve access to finance for SMEs via Structural Funds interventions. As a result, it is being used across Europe by various governments that are keen to support access to finance for their SMEs. Given this, I was recently alerted by one of my academic colleagues in Bulgari...

The Welsh Government may wish to consider several options as to how to take forward the findings of the access to finance review. For example, whilst there have been calls for a new state-owned bank, it could be argued that the foundations for such an organisation already exist in the form of Finance Wales. However, unlike other state-owned financial institutions that have been examined as part of this review, the main focus of Finance Wales has, for the last five years, been on establishing its reputation as a leading fund manager rather than on directly promoting economic development in Wales. In this respect, the Welsh Government could give Finance Wales a more direct remit so that economic development becomes its main priority, especially as questions clearly remain about its commitment to directly supporting SMEs in Wales, despite the presence of new board members. However, it is the conclusion of this review that, in its current form, Finance Wales is no longer fit for pur...