Venture Capital capitalizes to the tune of $100m
The management of the Venture Capital Trust Fund (VCTF) says it is increasing its fund pool to over US$100 million in 2011 to enable it support small medium enterprise investments.
To achieve that, the management said it expected to leverage its new capital injection with funds from foreign investors as well as local financial institutions to establish new funds.
It will also intensify its public awareness campaign as a way of educating SMEs on the benefits of equity investments as it seeks to attract more funds from local financial institutions.
Addressing a press conference in Accra to launch the fund’s vision for 2011, the Chief Executive Officer (CEO) of the VCTF, Mr Daniel Duku, said the fund had partnered both local and foreign investors to create a pool of GH¢ 83 million for SME investments as at 2010.
“In doing so, the Trust fund has established five venture capital funds and invested the Ghana cedi equivalent of US$ 17 million, adding that more than 1,000 direct jobs have been created by 39 portfolio companies.
The VCTF was established in 2006 by the Ghana Government tasked with the responsibility of providing capital to SME’s and also to promote venture capital, funds set aside to use in assisting SME’s to expand.
The fund started operations with GH¢22.4 million as seed money from the then government and has since ventured into many SME’s in the country.
The CEO said the VCTF recognised the need to complement the government’s efforts toward supporting SMEs and “wil1 continue to secure additional funding through our flagship public private partnership mode”, adding that the VCTF would continue to work closely with permanent source of funding to the fund.
Mr Duku said the fund, in collaboration with its partners, had committed GH¢3.7 million in commodity value chain activities which included sorghum and soybean production as “import substitution”.
According to him, the said capital had yielded an estimated 12,600 metric tons of sorghum, which had a market value of GH¢7.4 million, twice the cost of the capital invested.
The CEO noted that 8,000 smallholder farmers were integrated into the value chain activity which led to the creation of 1,400 full time employment in the participating communities and farmerbase organizations, adding “GH¢45,400 were paid to those communities and districts as local councils tax”.
Touching on the fund’s plans for 2011, Mr Duku said an “Investor Learning Journey” to attract both local and foreign strategic investors will be organised to raise funds.
“Emphasis will be placed on new initiatives such as yellow maize financing to support the poultry and livestock industry”, the CEO said, adding that the vegetable sector would also receive the needed attention from the fund.
Mr Duku said the fund had also resolved to establish and deepen relations with various professional bodies including the Bankers’ Association, Association of Ghana Industries, the Ghana Bar Association and the Private Enterprise Foundation.
He said the Ghana Club 100, an annual award scheme for companies that had excel in their areas of operations, had not targeted the SME’s a situation Mr Duku observed had not motivated the SME operators to excel.
“To spur entrepreneurship within the economy”, VCTF, he said, had thus resolved to collaborate with various industry associations and stakeholders to “institute an SME awards scheme to honour Ghanaian SMEs entrepreneurs who have established and sustained successful profitable businesses”.
Source: Daily Graphic