Ghana ’s Minister of Business Development, Dr Mohamed Ibrahim Awal, has announced plans by the government to set up a special fund to support startup businesses to expand their operations and create more jobs.
“We want to help small businesses to move to the next level and expand to employ more workers. Stagnant businesses cannot create jobs, but with support, they can scale up their businesses,” he said.
Here Is All You Need To Know
- The ‘Startup and Small Businesses Fund’, Dr Awal said, would be a $20-million facility for capital investment and would be rolled out in the middle of next year to augment initiatives already introduced by the government to support small and medium enterprises (SMEs).
- It would provide financial support for young businesses at interest rates lower than 10 per cent, Awal said.
- Dr Awal said the fund being set up by his ministry in collaboration with the Finance Ministry and private sector was different from existing packages for new ventures.
- The initiative, he said had been informed by an observation that a major challenge of many start ups and small business companies in the country had the ability to expand into bigger ventures but were financially incapable.
“All along what we have been doing is what we call nursing entrepreneurship. It is such that businesses are just for survival. We want to move from survival to growth,” he said.
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- Aside the fund and other support scheme the government continue to offer, he said the One District One Factory programme was an opportunity the entrepreneurs could grab to expand their business and create jobs.
Read also: Lessons This Founder Learned Raising A Series A Round Of Funding For His Startup
Several reasons explain why startup s in Ghana and West Africa struggle to raise fund to finance their growth: many entrepreneurs have limited knowledge of fundraising options available to them and don’t know how to “sell” their investment opportunity to potential investors. Also, they are perceived as riskier than larger companies and have limited access to collateral, which makes it difficult to access loans from banks.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world