Voluntary separation of employment (VSEP) packages were yesterday offered to staff of the National Entrepreneurship Development Company Limited (NEDCO). The announcement was made by chairman Clarry Benn during a special staff assembly in El Socorro, the main purpose of which, NEDCO said, “was to bring them up to date on decisions taken by the board to restructure and rebrand the company.”
Newsday understands the meeting, which lasted about two hours, began at 1 pm and that the VSEP offer was not surprising because, as one employee put it, “We had been aware the board was looking at restructuring, so we knew this was in the works.”
The decision to overhaul NEDCO emanated from recommendations made by PricewaterhouseCoopers (PWC), following a comprehensive financial and operational assessment of the company. PWC found that NEDCO’s active client base and loan portfolio per employee were not aligned with international industry benchmarks, making it uncompetitive.
NEDCO also cannot meet its operating costs, which represent 113 per cent of the total active loan portfolio.
“The typical percentage of operating costs to loan portfolio for the Micro Finance Sector in Latin America and the Caribbean is 45 percent,” NEDCO stated. In addition, the delinquency rate in its loan portfolio exceeded industry benchmarks.
The restructuring exercise will include reducing the number of satellite offices while continuing to grow and serve its customer base and finding a cost-effective approach to outsourcing non-core aspects of NEDCO’s business operations. Receipt of VSEP applications begins today (February 1) and closes at month-end (February 28), “allowing approved applicants to exit the company by May 1,” NEDCO said.