VCTF pushes for domestic funding to drive SME growth

VCTF CEO Michael Abbey announced, “We have validated that the model works.”

He stated that all exits have been profitable. Strategic investments can yield high returns while creating jobs and stimulating innovation.

Since its inception, the fund has invested GH¢359.6 million into various venture funds. This has catalyzed over GH¢2 billion in additional funding from private investors. For every cedi committed by VCTF, GH¢5.58 was raised from external sources.

Portfolio companies have paid nearly GH¢47 million in taxes. This highlights the fund’s economic contribution to Ghana.

The fund's investments cover sectors like agri-processing, healthcare, education, and manufacturing. Notable exits include Caltech, which delivered over twice the invested amount, and Legacy Health with a strong return.

Other success stories include food processing company Elsa Foods and educational institutions like AUCC and Penfield.

Despite these achievements, Mr. Abbey warned about the sustainability of Ghana’s venture capital ecosystem. He noted an over-reliance on foreign capital remains a concern.

Most funding still comes from external sources. This leaves local businesses vulnerable to international donors' decisions.

Mr. Abbey explained that foreign capital can exit at any time, as seen with USAID's actions. Therefore, domestic funding is critical for stability.

VCTF is exploring initiatives to strengthen local capital sources. These include tapping pension funds and promoting corporate social responsibility contributions to SME-focused venture funds.

They are also launching a ‘Responsibility to Grow’ campaign encouraging big businesses to support smaller firms.

Percival Amponsah, VCTF’s General Manager, described their role as catalytic investors. VCTF often anchors new funds by taking the first-loss position to de-risk investments and attract private capital.

This strategy encourages institutional investors to back first-time fund managers. “We act like an anchor tenant in real estate,” Mr. Amponsah said.

Once VCTF invests, it signals credibility and helps attract others on board.

The trust plans several new initiatives soon. These include an ‘Ejumera Fund’ to support 10,000 start-ups annually alongside government efforts.

They will also launch a 24-Hour Economy SME Equity Fund and a Technology Innovation Fund with the Ministry of Communications under the Ghana Digital Acceleration Project.

Mr. Abbey described the trust's future as “exciting.” More programs will be rolled out soon to deepen the fund’s impact.