Helena Selby
29 October 2008
The Chief Executive Officer (CEO) of Venture Capital Trust Fund (VCTF), Mr. Nana Osei Bonsu has affirmed that the Small and Medium Enterprises (SMEs) represent about 90% of all economic activities in the country, hence the need to support them in order to help the economy grow.
Speaking at a press conference in Accra, he noted that the government in 2004 established the VCTF with the vision to provide low cost financing to business, create jobs, improve wealth creation towards poverty alleviation, as well as provide finance to Small and Medium Enterprises (SMEs) and also develop and promote the venture capital industry in Ghana. According to him, the funds are open to every business but the priority sectors are established based upon government's economic growth programme, and that currently the priority sectors include agriculture, pharmaceutical, ICT tourism industries and energy.
He mentioned that an SME with an economic activity value not exceeding US$ 1million; excluding land and building, qualify for the Fund. The SME can be a start-up or an existing business and it has to be privately owned not government institution, he added. "Funding is not provided for businesses that engaged in direct import to sell. However, merchandising or wholesaling of locally manufactured goods is permissible," he noted. Moreover, the promoter of the business bears 50% of the funding requirement for the business and the promoter will always hold the majority ownership of the company, he said.
The CEO pointed out that the Board of Trustees leveraged the government's endowment of GH¢ 22.4 million to partners with the private sector to bring on board additional funds of approximately GH¢34.5 million from the private sector investors. What is more the Public Private Partnership (PPP) is the first of in its kind where a government institution has leveraged its resources with the private sectors to create more funds than it was endowed with. He explained that as a result of that PPP, the Venture Capital Industry has grown overnight to a Total Fund of GH¢56.9 million to be sourced out by Qualified SMEs.
Mr. Osei Bonsu indicated that private institutional partners engaged in the Venture Capital Partnership include the Activity Ventures Finance Co, Bedrock Ventures Capital Finance Co, Gold Ventures Capital Limited and the Fidelity Equity Fund 11. He stressed that within a relative short period of two and half these established partnership VCTFs constitute the infant stages of a variable ventures capital industry in the country.
According to him, in VCTFs quest to equip technically SMEs in the best business practices and professional service, there are programmes such as training and capacity building for staff, monitoring- corporating and executive programme as well as contract services by Business Solution Service providers in accounting, management, marketing and others.
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