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08.03.2006 Business & Finance

Venture Capital Fund Hits $22m Mark

By Ghanaian Chronicle

Sources close to the Venture Capital Trust Fund (VCF) revealed to the Business Chronicle last week that the Fund had accrued an amount of $22 million, up by one million dollars from last year's figure.

The first Chief Executive Officer (CEO), Nana Osei Bonsu, is currently running the fund single-handedly, though recruitment for personnel had started.

The VCF is intended to provide financial resources to small and medium scale enterprises in the country. About 70% of the funds would go to areas such as agro-processing - except cocoa, information communication technology, fisheries, pharmaceuticals, tourism, poultry, with the rest left open for any project not included in the list but very viably ran.

This is to create both financial and social returns.

After a year of delay in the implementation of the law, Nana Osei Bonsu, the architect of the law was appointed CEO of the secretariat and processes have began to select fund managers to operate the fund.

For a fund manager to qualify to access the trust it must have an initial minimum of $1.5 million and be in the business of assisting the development of small businesses by making equity and quasi-equity investments and providing business and managerial expertise to small business in which it has made or proposes to make investment.

Some fund managers have applied to be fund managers and some would be selected out of the lot.

Fund managers would borrow from the fund at 50% below Bank of Ghana Prime Rate and must be a registered member of the Securities and Exchange Commission as an advisor before access can be granted.

Small and Medium Scale Enterprises that would participate in the fund would have to employ over 100 people.

The Venture Capital Fund would provide capital for start-ups enterprises and high-risk ventures. It would focus mainly on medium-sized, indigenous growth companies with expansion projects and start-ups.