The Venture Capital Trust Fund (VCTF) is pushing for a review of its Act for a more sustainable mechanism for equity funding to support Small and Medium Enterprises (SMEs).
The amendment will financially propel SMEs, which are the backbone of the Ghanaian economy in terms of employment and GDP growth.
The VCTF was established under Act 680 in 2004 to provide financing options for SMEs, primarily through equity and quasi-equity investments but the current framework lacks provisions for a reliable and continuous flow of funds.
Speaking at a media breakfast meeting to mark its 20th anniversary, General Manager of the Fund, Percival Ofori Ampomah said, the existing legislation limits the Fund’s ability to meet the growing financial demand from SMEs.
“Venture capital by itself is established by an Act of parliament. There are things that impede the work of venture capitalists. So in the next immediate couple of years, we want to remove those impediments. The Act itself must be reviewed because clause 3 of the Act tells us to the list of sources of funding the Trust Fund is supposed to get. Now after 20 year that list needs to be looked at again because the national reconstruction levy has been repealed but it’s still in the law.”
Currently, Ghanaian SMEs face significant challenges in accessing affordable capital, often relying on high-interest loans from traditional financial institutions.
Equity financing from the VCTF offers a more flexible and growth-oriented alternative, but the lack of sustained funding limits its impact.
The review of the VCTF Act aligns with broader government efforts to boost private sector development and promote job creation.
Parliament is expected to consider the proposal in the coming months with stakeholders optimistic about the potential for transformative changes.
If successful, the reform could position the VCTF as a key driver of SME growth, enabling businesses to scale, create jobs and contribute meaningfully to Ghana’s economic transformation.
“This is one thing we want to make sure to achieve – to review the Act for purpose and to bring it up to date with current situation on the ground. In so doing, we will be able to convince the government to change that source of funding to a more permanent source of funding for us to be able to continue our work”, the General Manager added.
