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NEDCO offers VSEP to employees

Published: 
Friday, February 2, 2018

Employees of the National Entrepreneurship Development Company Limited (NEDCO) have been presented with a Voluntary Separation offer.

The offer was extended by the chairman Clarry Benn during a special staff meeting on January 31, at the Atrium, El Socorro.

Employees claimed the main purpose was to bring them up to date on decisions taken by the Board to restructure and rebrand the company.

Also addressing employees was deputy chairman Ramesh Ramdeen; chairman of the Human Resources Committee, director Willa Guy- Straker; and NEDCO CEO Albert Chow.

During the meeting, Benn indicated it had become necessary to take these steps to ensure that NEDCO remained strategically poised to discharge its mandate in an environment which called for acute sensitivity and responsiveness to prevailing social and economic conditions, while steadfastly adhering to international industry benchmarks.

He claimed the Board was also mindful of the comments and recommendations made by the Public Accounts (Enterprises) Committee (PAEC), whose members expressed grave concerns over NEDCO’s level of efficiency, productivity and overall viability.

The transformation, he said, was in keeping with the critical mission of NEDCO to promote and support the development of new and existing Small and Medium sized Enterprises (SMEs), whose needs could not be met by traditional lending agencies.

The decision to restructure and rebrand NECO emanated from the recommendations of PricewaterhouseCoopers (PWC) who conducted a comprehensive financial and operational assessment of NEDCO immediately following appointment of the new board in December 2015.

The PWC assessment highlighted the fact that NEDCO’s income from its core business; loans and training, was insufficient to cover its operating costs - making the business, in its current dispensation, largely dependent on government disbursements to meet operating costs.

It was indicated further that the current financial state of NEDCO is not sustainable and rapid action must be taken to transform the business model.

Benn stressed that the situation was not only unacceptable, but was a reflection of inappropriate business practice especially by an organization like NEDCO which preaches the gospel of financial viability and sustainability.

The decision to restructure and rebrand also took into account the current financial circumstances, accepting that government subsidies can no longer be depended upon and as such, in keeping with its ingrained philosophy, it was incumbent upon NEDCO to develop a new business model and transform the organization into one that was both viable and independent of government funding.

The PWC report showed that NEDCO’s active client base and loan portfolio per employee were not aligned with international industry benchmarks, making it uncompetitive in its present operational framework.

It reported that NEDCO was unable to meet its operating costs which represent 113 per cent of the total active loan portfolio.

NEDCO is a state owned Limited Liability Company established in 2002 to assist with the development of small and micro businesses

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