| VENTURE CAPITAL TRUST FUND - MONEY FOR YOUR BUSINESS! |
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| The Government of Ghana established the Venture Capital Trust Fund (VCTF) to provide low cost financing to businesses so they can grow, create wealth and jobs. The vision of Government is that this scheme will enrich businesses with enough resources to create jobs. Consequently, with enough wealth and jobs created, Government revenues would increase (through taxes) and ultimately add to the pool of funds available to be down-streamed to businesses for investments. This definitely is a win-win cycle. |
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| The Small Scale and Medium Enterprise (SME) sector constitutes in excess of 90% of the economy of the country. The need to provide secured source of financing for this sector cannot be over emphasized. SMEs, if properly structured and capitalized have the potential to grow and spearhead accelerated growth of this economy into a middle income status. Unfortunately since there is a dearth of long term investment funds for SMEs (as a consequence of the banks and securities markets shying away from the high risk investments in these sectors), it has became imperative for the Government to set up a venture capital fund that will provide long term funding for the high risk investment needs of the SME sector. |
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| Such support to the business sector is in consonance with the recognition that the private sector is the engine of growth of the economy and the policy to promote and support them, is to engage the private sector as an equal partner to help government achieve the country’s developmental goals. |
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| The functions of the VCTF are basically two: |
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| The provision of credit and equity financing to eligible venture capital financing companies to support small and medium-scale enterprises which qualify for equity, quasi-equity and credit financing. |
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| The provision of monies to support other activities and programs for the development and promotion of venture capital financing in the country. |
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| In order to achieve the above objectives, the Venture Capital Trust Fund has partnered with the Private Sector to establish various Venture Capital Financing Companies whose sole authorized business is to assist in the development of SMEs by making available for their use, equity, quasi-equity and credit financing in addition to providing them with Technical Assistance to boost management expertise and productive capabilities. |
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| The Venture Capital Finance Companies (VCFC) are actualizing the Government’s vision of putting in place an effective mechanism for making low cost financing available to Small and Medium Scale businesses to facilitate growth in productive sectors and subsequently create more jobs and generate wealth. |
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| ALL APPLICATIONS FOR FUNDING MUST BE MADE TO ANY OF THE VENTURE CAPITAL FINANCE COMPANIES. |
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| Who benefits or qualifies? |
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| Any individual or business entity that needs financing to establish/start up or run a business. The money of the Venture Capital Fund is available to qualifying Ghanaian businesses. |
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| Would the SME management and ownership change by accessing the fund? |
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| This question is plaguing the minds of most entrepreneurs. Depending on the expertise available in the potential investee company, that company may be provided with management and or other technical assistance to boost the company’s capacity to utilize the funds as intended. The investment package that may be administered to the beneficiary SME may vary the ownership structure. |
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Accessing Venture Capital Funds by SMEs |
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| Financing startup, existing and expanding enterprises has been a major concern for entrepreneurs who have the urge to push their businesses to a higher level.Provision of financing to businesses is critical for the development of these SMEs.The Venture Capital Trust Fund (VCTF) is there to provide funds to SME’s. There are sectors of the economy that receive priority in terms of the provision of funds. |
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| Currently the priority sectors are ICT, Agriculture & Agro-processing, Tourism and Pharmaceutical. These priority sectors may benefit from about 55% of the total funds available. Venture funds are not limited to only the priority sectors, all sectors of the economy except direct imports to sell, can receive funding. |
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| The basic requirements for accessing the fund are: |
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A comprehensive business plan (Your Business Roadmap) with Projections for 3 years.
Incorporation Papers (if applicable).
Audited financials for past 3 years for existing business.
Tax Clearance Certificate.
Any other information that may be requested. |
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| SME’s seeking funding will submit the basic requirements stated above to the respective VCFC. However businesses are encouraged to talk to any of the VCFCs before they prepare any new documentation. |
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| Currently Venture Financing companies established and running include |
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Activity Venture Finance Company Tel: 021 244473/65
Bedrock Venture Capital Finance Company Tel: 021 671797-9
Gold Venture Capital Limited. Tel: 021 255633 Fidelity Fund II Tel: 021 782625 |
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| A minimum of 51% equity contribution from the business owner (not necessarily cash) is required to access the funds from a VCFC. |
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| Any collateral? |
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| The VCTF does not require any collateral for accessing the fund. What it needs is a good viable project. |
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| Have entrepreneurs actually accessed the fund? |
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| Portfolio of some of the Venture Capital Finance Companies contain a variety of approved projects of SME’s in various sectors of the economy spanning education, Information Technology, Agriculture and Agro processing, financial institutions etc. Following is a short profile on some of the many investments made so far: |
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| 1 A Poultry Farm |
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| The project involves the revival of a layer production farm situate, in the Brong Ahafo Region. The poultry industry is the largest consumer of agro-industrial by-products besides consuming close to 30% of maize produced locally, thus offering job opportunities indirectly to several Ghanaians. |
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| 2 A Savings and Loans Company |
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| The project involves management and operational restructuring as well as retooling of a savings and loans company. The savings and loans sector has evolved over the years targeting traders, artisans and the informal sector in general who have virtually been eliminated from the formal banking sector. |
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| The essence is to enable the company increase its pool of loanable funds to lend to Micro, Small and Medium Scale Enterprises (MSMEs), enhance human resource base and invest in technology. |
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| 3. A Fruit Juice Manufacturing Company |
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| The project involves the expansion and retooling of a 3 Metric Ton operating-capacity pineapple processing facility. Project will provide ready market for pineapple farmers in the catchments area, adding value to primary agricultural produce and thus encourage farmers to increase their farm sizes. It will provide jobs to significant number of farmers within the locality. |
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| 4. An Information Technology company |
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| The project involves the production of high quality laser toner cartridges in Ghana to satisfy the growing market in the West African Sub-Region through recycling of waste laser toner cartridges using the state of the art technology. Each toner cartridge contains four pounds of non-biodegradable materials that many people dispose of incorrectly, thus harming our environment. With recycling of these disposable cartridges, will help reduce office waste by 75% and therefore reduce pollution of the environment. |
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| 5. An educational set-up |
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| The project established a grade ‘A’ school in one of the affluent residential areas in Accra. After several years of stagnation the public school sector cannot meet the growing demand of many Ghanaians. There is therefore the general consensus that increased private participation in education is going to be part of the national strategy for accelerated improvements in the educational system as a whole. |
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| 6. A Garment Manufacturing Company |
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| The project involves the production of ladies underwear of various shapes and sizes. The products were initially produced to meet local demand for ladies underwear. Having met this objective of supplying the local market with quality products, the company is now resourced to adequately position its operations to expand its activities into the export market. |
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| The young Venture Capital Industry is gradually resourcing various entities to enhance and expand their operations and create additional employment opportunities. |
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VENTURE CAPITAL TRUST FUND
“GROWING BUSINESS TO CREATE JOBS IS OUR BUSINESS” |
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