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VENTURE CAPITAL ROAD SHOW ENDS
Mr. Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning has noted that the passage of the Credit Report Act (Act 726) would facilitate the establishment of credit referencing bureau to assist in reducing the risk in lending, thereby enabling banks to lower the cost of capital to the private sector to facilitate required growth in the economy.
He the credit reporting bill among other financial laws passed recently and schemes like the Venture Capital fund are geared towards the realization of government’s vision of making the private sector the true engine of growth for the economy.
Hon. Baah-Wiredu said this during the last Road show on the Venture Capital Trust Fund in Accra. The Venture Capital Trust Fund (VCTF) was established by government with the aim of providing an effective mechanism for low cost financing for businesses.
The road show held throughout the country was to afford Small and Medium Scale Enterprises an opportunity to learn more about the fund and how they could assess the funds.
The Honourable Minister said government was hopeful that the fund would enrich businesses with enough resources to create jobs to increase revenues and ultimately go to replenish the pool of funds available to be down-streamed to business for re-investment.
"We appreciate why banks have a higher risk perception of SMEs and often shy away from administering credit to them,", hence the need for such effective and functioning financial intermediaries like the Venture Capital Fund, he added.
Nana Osei Bonsu, Chief Executive Officer of VCTF said the fund was available to all sectors of the economy but priority would be given to sectors pursuing programmes and projects in line with government's economic growth policies and objectives.
He said currently the priority sectors identified are the pharmaceutical, ICT, Agro-processing and tourism industries, which may benefit from about 55 per cent of the total funds available.
He said the fund was a joint venture of Bedrock Venture, Activity venture, Gold Venture Capital Limited with a capital of 10 million US dollar each and 16.65 million dollars from Fidelity Capital Partners Limited.
Nana Osei Bonsu said loans granted by the fund to companies was on a long-term basis so that there was no immediate debt service that constraint the business and carry an interest rate that was below the market rate.
He said any business entity or individuals who needed financing to establish or run business could have access to the fund.
The Venture Capital Trust Fund is a scheme established by Government through Parliamentary Act 680.
