Venture Capital Fund Launched

Accra, Nov. 14, GNA 96 Finance Minister, Mr Kwadwo Baah-Wiredu launched the Venture Capital Trust Fund (VCTF) on Thursday with a call on beneficiaries to ensure prudent management of resources to enable others benefit from the scheme.

He said the successful implementation of the scheme in financing Small Medium Scale Enterprises (SMEs) would go a long way to make government's avowed goal of reducing poverty through wealth creation with the private sector playing the leading role a reality. The VCTF was established by government in November 2004 with the aim of providing investment capital to SMEs for the development and promotion of venture capital financing.

The VCTF was provided with an endowment fund of 25 million dollars but had been able to leverage this through joint partnership finance companies to 44 million dollars, using only 10 million dollars of the endowment.

Mr Baah-Wiredu said the vision of the government was to establish a fund that would provide low cost financing to businesses to grow, create wealth and jobs.

He said the SMEs sector constituted about 90 per cent of the economy and if properly structured and capitalised could spearhead the accelerated growth of the economy.

Mr Baah-Wiredu said to attract and encourage private investors to participate in the development of the venture industry, the government had granted in the 2007 budget full tax exemption for 10 years while losses from disposal of shares now covered five years among others. He expressed the hope that with these tax incentives a critical mass of venture capital companies would emerge to drive government's accelerated growth strategy.

Six venture companies would become operational by March next year to serve as bridge in making resources available to the SMEs. Nana Osei-Bonsu, Chief Executive Officer (CEO) of VCTF, stressed that the Fund's objective was to create jobs and triple the value of SMEs over the next four years.

He said businesses, which sought assistance from the fund must have in place a credible business plan with clearly stated objectives and a direction.

This must be accompanied with a tax clearance certificate, indicating payments over the years.

Nana Osei-Bonsu said the Trust was in the process of putting in place a core of retired senior executives, whose expertise would be tapped to offer technical assistance to any business that might require one before funding was provided.

This consultancy services would be paid for by the fund, he explained. He asked SMEs to approach the Fund as no collateral was needed to access the funds.

Currently, there are four core sectors of focus of the fund. These are pharmaceuticals, ICT, tourism and agriculture. Nana Osei-Bonsu explained that although these were the priority areas any other viable business opportunities would engage the attention of the VCTF.

Dr Samuel Nii Noi Ashong, Chairman of the VCTF Board, said about 221 billion cedis had accrued to the fund for disbursement in support of credible businesses.

He said the fund was assisting 1,200 outgrowers of sorghum in the Attebubu, Wa, Tamale and Bolgatanga areas. The produce is bought by Guinness Brewery to replace imported barley. However, he cautioned, beneficiaries not to assume that the money was =91free' and then make repayment difficult. 14 Dec 06