The Cuban Enterprise Fund
The Cuban Enterprise Fund is modeled after the successful enterprise funds created by the Support for Eastern European Democracy Act of 1989, following the fall of the Berlin wall.
Its purpose, like that of previous funds, is to assist in the development of private enterprise by providing equity investments, loans, technical assistance, training, and other forms of assistance to truly independent businesses within host nations.
A Cuba in transition will face a number of challenges, including obstacles in the development of a vibrant private sector. The lack of a civil society, the need for government deregulation, poor infrastructure, and issues regarding property rights will be some of the obstacles that Cuban entrepreneurs will face as they attempt to start or expand their own businesses. An important obstacle, however, will be the availability of capital, a problem that will not be remedied only by the large amount of foreign investment expected into the island. The Cuban Enterprise Fund aims at helping address this obstacle by providing equity and other investments in small and medium size businesses within Cuba.
Just like its sister funds, an independent Board of private individuals with recognized experience in private business and finance would govern the Cuban Enterprise Fund along with appropriate directors chosen from within Cuba. The Board of the Fund would have complete autonomy to decide where and when to make investments, separate from political considerations or pressures from governments or donor institutions. Donor nations and institutions would take great care in assembling a truly professional Board and in avoiding its politicization.
The Cuba Study Group has proposed the creation of the Cuban Enterprise Fund in the amount of $300 million to assist in the development of small and medium sized businesses in Cuba and provide Cuban entrepreneurs and financial institutions with training, technical assistance, and mentoring during a process of transition. The Fund would draw from contributions from the United States Government, International Financial Institutions, and European nations, and later, sources of private capital.
The role of the Cuba Study Group is to prepare the proposal and seek the cooperation and commitment of the prospective donors, as well as lend the experience and expertise of the Cuba Executive Corps (the mentoring initiative created for the CSG Microloan initiative) for future training and mentoring of Cuban entrepreneurs. The Cuba Study Group would not be responsible for funding, managing, or staffing the Cuban Enterprise Fund or directing the type of investments the Fund directors make, nor will any of the Cuba Study Group’s members or staff have any financial interest in the Fund.