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19.10.2004 Business & Finance

Venture Capital Trust Fund to kick-start with 87 billion cedis

By GNA

Accra, Oct. 19, GNA - Eighty-seven billion cedis is to be used as seed money for a Venture Capital Trust Fund to help capitalise Medium and Small Scale Enterprises (MSEs) in Ghana, Mr Yaw Osafo Maafo, Finance Minister told Parliament on Tuesday.

"A survey of Ghanaian private sector has revealed that ninety-three per cent of all businesses are MSEs, it, therefore, stands to reason that such a fund is extremely important."

The Minister, who was moving a motion for the second reading of the Venture Capital Trust Bill, said the money represented 25 per cent of the National Reconstruction Levy raked in so far. He said the fund would provide long term funding for the MSEs with "hardly any interest".

Mr Osafo Maafo said most MSEs grappled with huge interest rates when they contracted loans thus making investing in such areas unattractive.

He said the Management of the Millennium Challenge Account was being convinced to support the fund idea.

"We shall use part of what would come to us to beef up the fund," he said.

Captain Nkrabea Effah-Dartey (ret), NPP-Berekum, said the idea of private development was what drove the New Patriotic Party (NPP). He said, "it is so difficult to access credit from the banks and when they (MSEs) get it, the interest they are to pay is so high. "This fund would open the floodgates to our industrial revolution", he declared.

Major Samuel K. Amponsah (ret), NDC-Mpohor Wassa East, asked that the management and disbursement of the fund should not be politicised. "The money should not go only to the NPP people;" he said. Mr Appiah Ofori, NPP-Asikuma /Odoben/ Brakwa, said an earlier fund involving some five million dollars failed and asked that it should be investigated to unearth issues that would strengthen the proposed fund.

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