Above: Kingston (CJ Photo)

By the Caribbean Journal staff

The Development Bank of Jamaica will be launching a new venture capital fund in 2014, according to Finance Minister Dr Peter Phillips.

The fund is set to launch within the first half of the next fiscal year, which begins Apr. 1, 2014.

The fund is part of the Jamaica Venture Capital Programme, supported by the Inter-American Development Bank.

“It takes place against the background where we recognise that there are many factors that impede the development of the MSME sector,” Phillips said. “There is a high degree of informalization, inadequate knowledge of modern business procedures, the difficulties of accessing financing, problems of high energy costs, and some of these will require government interventions in other ways and policy interventions to help solve them, but it is in this context that the DBJ with its mandate to facilitate economic growth, has reached out in very significant ways to place emphasis on that sector.”

The Minister said the fund assumed a “central place in the policy perspectives” of the current administration in Jamaica.

Joseph Matalon, chairman of the DBJ, said venture capital was one of the ways to address a lack of access to long-term financing for “high-potential” small and medium-sized enterprises.

“We recognize that there continues to be a persistent gap when it comes to longer term SME financing,” he said. “Within the next 12 months, it is our intention to provide seed funding to a newly established venture capital fund or funds, but we also wanted to ensure sustainability, and our main objective, is to therefore lay the proper foundation for a vibrant and sustainable venture capital and private equity industry that is driven by the private sector.”

The IDB will be providing about $150,000 in grant financing, with the DBJ putting up about $128,000 for the fund.

Jamaica began its first-ever venture capital conference in Kingston on Monday.