VCTF to deploy GH¢1.5bn to boost SMEs

Yaw Owusu-Brempong, Chief Executive Officer, Venture Capital Trust Fund (VCTF)
  • GH¢1.5bn to support SMEs in 5 years
  • GH¢60m deployed so far this year
  • Extra GH¢35m by close of 2022

 In the next five years, Venture Capital Trust Fund (VCTF) will deploy GH¢1.5 billion to support small and medium-sized enterprises (SMEs) while accelerating their growth, the Chief Executive Officer of the VCTF, Yaw Owusu-Brempong, has revealed.

This, the CEO said, has become necessary given the significant role SMEs play in the country, but faces serious challenges when it comes to funding.

In an interview with the B&FT following the signing ceremony of investment agreements for MIREPA SME Fund and WANGRA Green Ventures, the CEO indicated that the VCTF stands to increase the capital pool to the SMEs sector.

“Over the next five years, VCTF intends to deploy GH¢1.5 billion to support SMEs. With this amount, we intend to leverage about GH¢5 for every GH¢1 spent, thereby increasing the capital pool to SMEs to about GH¢7.5 billion.

This is an ambitious plan and calls for all key stakeholders in the finance industry and other international agencies to partner with the Trust Fund to make this plan a reality,” Mr. Owusu-Brempong said.

The VCTF investment agreement, signed with MIREPA SME Fund and WANGRA Green Ventures – venture capital (VC) Fund Managers, will deploy GH¢35 million to SMEs in Ghana. This makes total capital deployment toward SME finance to GH¢60 million in under 2 months this year.

“We intend to deploy about GH¢95 million by year-end, so stay tuned,” the CEO assured.

VCTF has been recapitalised under the Ghana Economic Transformation Project by World Bank with US$40 million to invest in both early-stage and transformational sectors of the Ghanaian economy in addition to a technical assistance facility of US$5 million, which allows the Trust Fund to design programmes for the development of the VC ecosystem.

Between 2006 and 2020, VCTF committed about US$25 million to seven funds.

“If you look at the fact that between 2006 and 2020, we’ve done a total of seven funds or we’ve committed to seven funds, and this year alone, we’ve done three, then, that is a significant growth. We’ve committed roughly about US$25 million but at different exchange rates because it’s over a period of time,” Mr. Owusu-Brempong noted.

“By these investments, VCTF has demonstrated its willingness to back and build a talented group of young individuals who are able to combine industry and operational know-how with growth investment expertise to partner exciting SMEs and talented groups of entrepreneurs in strategic sectors of the Ghanaian economy,” he said.

Some successful investments include Joyce Ababio Fashion, Axis Pension Fund, African University College of Communications (AUCC), Legacy Girls, Rising Sun Montessori, Everpure Ghana as well as Scientellect DNA Diagnostic Centre and Caltech – an ethanol processing business – which was later taken over by Kasapreko.

“We are very selective in our choice of fund managers because VC investment is not about managing money, it is about managing several businesses at the same time; so you need skills that cut from investment to entrepreneurship, leadership and a general understanding of the business environment, and the kinds of support to give to businesses to thrive,” the CEO mentioned.

He assured that VCTF will continue to support further development of the VC/PE ecosystem through its technical assistance facility.

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