Tap private equity, venture capital - SMEs told

Small and medium-scale enterprises (SMEs) must consider private equity and venture capital as viable options for accessing long-term funding -- which most universal banks fail to provide -- to sustain and scale-up their businesses, says Matthew Boadi Adjei, Chief Executive Officer of Oasis Capital Limited, a Pension Fund managing company.

Speaking to B&FT in an interview on the sidelines of a one-day business symposium on innovations in SME financing in Accra, he said private equity -- aside from providing long-term financial support, also offers business development expertise that will help start-up businesses thrive in the competitive business environment.

“Small- and medium-scale enterprises usually comprise early-stage and growing businesses that need more than just funding to survive, and this is what makes private equity and venture capital viable options to help them navigate the risk of financing.

“Private equity and venture capital companies provide key value-added services that ensure discipline, strategic planning and effective management decisions which seek to make SMEs sustainable and more productive,” he said.

The symposium brought together key stakeholders in the capital market, financial institutions and government representatives, to brainstorm on how to build a vibrant SME sector as a key contributor to economic progress.

The event also saw the launch of Oasis Africa Fund (OAF), a US$50million SME investment fund that will be injected in some key economic sectors across five West African countries: Ghana, Nigeria, Côte d’Ivoire, Sierra Leone and Liberia.

The Fund’s main target will be SMEs that provide essential services for the growing African middle-class, using scalable business models in key sectors such as housing and hospitality, private education, health and related services, food services, and financial services other than banking.