Twenty-one Small and Medium Enterprises (SMEs) have benefited from four Venture Capital Financing Companies (VCFCs) partners of the Venture Capital Trust Fund (VCTF) established by the government in 2004 to provide low cost funding to SMEs.
To date, the four VCFCs have invested GH¢9.8 million in the SMEs in the Greater Accra, Western, Brong Ahafo, Eastern, Ashanti and the three Northern Regions, said Nana Osei Bonsu, Chief Executive Officer of VCTF.
Speaking at the Meet-The-Press series in Accra on Tuesday, the CEO said the VCTF, also mandated to develop and promote a venture capital financing industry in Ghana, had partnered with the private sector to establish four VCFCs.
They are, Activity Venture Finance Company, Bedrock Venture Capital Finance Company, Gold Venture Capital Limited and Fidelity Equity Fund II Limited.
Nana Bonsu said other than intermediation by VCFCs, the Trust Fund itself invested GH¢2.16 million in the West African Sorghum Value Chain Project between 2006 and 2007 in the three northern regions and parts of the Brong Ahafo Region.
“In 2006, the trust Fund invested GH¢365,000 in the West African Sorghum Value Chain project. Prior to the Trust Fund's involvement in the project, total sorghum production was about 100 metric tones. In 2006, production shot up to 903 metric tones after VCTF investment that brought more farmers to the programme.”
Nana Bonsu said total production in 2007 was 2,000 ton and it was expected that by close of the 2008 farming season, sorghum production would exceed 3,000 tons involving farmers in the Upper East, Upper West, Northern and parts of Brong Ahafo regions.
He said the project was an import substitution programme in which farmers in the regions produced sorghum to replace imported barley used by Guinness Ghana Limited.
“As a result of this intervention by the VCTF, direct incomes to farmers rose from almost zero to GH¢102,000 in 2006 and GH¢371,250 in 2007, an increase of 264 per cent in one year.”
According to the CEO, VCTF did not only provide funding to companies, but also offered technical assistance to those companies with the aim of creating efficiency in the operations of the companies for successful investment.
He mentioned training and capacity building for staff and the companies, monitoring corporate and executive programme and contract services by business solution services providers in accounting, management, market, chemical engineering as areas that they gave technical assistance.
On the way forward, Nana Bonsu said the Trust Fund would focus on sustaining its public awareness and promotional programmes across the nation to erase misunderstanding of Venture Capital Financing and intensify investment initiatives to establish more finance companies to serve other parts of the country.
It would also explore warehousing receipt system to serve as market for specific farm produce and also provide storage facilities for food security, among other