Minister of Finance and Economic Planning, Dr. Kwabena Duffuor, has asked the new board of Venture Capital Trust Fund to push for the review of legislation on the fund in such a way as to improve venture capital funding in the country. "These may include legislation that would allow institutional investors to invest in venture capital, unlisted shares, and small capitalisation companies. "Those that involve measures to correct the market failures in the provision of equity capital for small medium and micro enterprises (SMMEs) and the provision of tax incentives for business-angel investments should also be considered," the minister told the new board in Accra last week. He said this would help to promote venture capital enterprises, recognising their. crucial importance if the economy is to leap-frog in growth and employment terms. "SMMEs account for nearly half of national output in many developing countries and close to 60 percent employment. "However, evidence indicates that about 95 percent of SMMEs rely solely on their personal resources or loans from friends and relatives, which are unsustainable sources," he said. He told the new board that the task ahead of them is to provide the needed support and guidance to SMMEs to develop them to the point where they can easily access credit. "As a general rule, the riskier the business, the more attractive is venture financing; and only after the business has proven its success over time can it slowly switch to debt-financing," The minister noted. With emphasis on the robust role business-angel finance can play, the minister told the board to give it special attention because of the huge contribution it makes towards SMMEs finance, rather than the official venture capital funds. Given its large potential, he assured of government's readiness to grant tax exemptions in the tax system to business-angel transactions if it works out successfully. Business angels include successful entrepreneurs who want to help other entrepreneurs get their businesses off the ground. Usually they are a bridge from the self-funded stage of a business to the point that business needs levels of funding that a venture capitalist would offer. The venture Capital Trust Fund was established by an act of parliament (Act 680) in 2004 with the primary responsibility of providing long-term funding to support the development of SMMEs. Moneys disbursed by the fund need not be paid back. The venture capitalist only pays dividends to government in the year it decides to pay dividends. In his remarks, the chairman of the new board, Mr. J.H. Owusu Acheampong said that the board is made up of experienced men and women and that they would be looking up to the minister for guidance. The other members of the board are Nana Osei Bonsu, Mr. Alex Tetteh, Richard Lassey Agbe-nyefia (MP), Mr. Daniel Ato Kwamena Mensah, Mr. Alex Aseidu, Mr. Benjamin Acolatse, Mrs. Susan Okyere and Mr. Amos Dotse. Source: B&FT