Venture Capital Trust Fund expands initiatives to fund agriculture

A Soya Value Chain Project is being established in Ghana with the objective of financing of seed germination and production of soya beans for the poultry industry.

The initiative of the Venture Capital Trust Fund (VCTF) targets nucleus farmers, out-growers and farmer-based organizations to benefit from the project.

The value chain intervention strategies seek to build partnerships with key institutions, especially incubators and centres of innovation, to promote entrepreneurship with the aim of covering research findings into potential business proposals and viable businesses for funding.

“It is expected that this collaboration and the associated research thereof will go towards improving productivity and economic outputs from the Soya industry,” said the Trust Fund’s Chief Executive Officer, Daniel Duku.

Since inception in 2006, the Trust Fund has disbursed $3.5million in agricultural value chain financing of cereals and grains for the poultry, livestock and brewery industries.

From November 2014, the Trust Fund would activate a $20million agricultural fund.

“It’s a bigger fund so more entrepreneurs, more SMEs can apply,” stated Mr. Duku. “That is not necessarily going to stick to the Soya bean but all the agric sectors of the economy.”

Small businesses have complained about the cumbersome processes in accessing support from the VCTF – a situation that often discourages the sector from exploring funding options under the facility.

Mr. Duku however says a review has resulted in cutting down the processing period from six to three months.

“A lot have changed and we are receiving more applications at this time and processing them faster,” he noted.

The Trust Fund has also proposed to provide wholesale lending for rural banks to increase their capitalization. This is to extend the reach of venture capital to smallholder farmers in rural communities.

A zonal office has been established in Kumasi as part of a drive to deepen financing of the value chain programmes in the northern sector of the country.

The VCTF is a government of Ghana backed private equity initiative providing long-term funds and technical support to enable SMEs grow and expand operations.

Story by Kofi Adu Domfeh