Minister of Business Development, Mr Mohamed Ibrahim Awal
The Minister of Business Development, Mr Mohamed Ibrahim Awal, has announced plans by the government to set up a special fund to support start-ups to get access to cheaper sources of funds.
The fund, expected to have a seed capital of GH¢20 million, will be designed to provide financial support to young businesses at interest rates lower than what the commercial banks offer, the minister said.
Mr Awal disclosed this last Thursday when he toured some job stations and hubs to groom Small and Medium Enterprises (SMEs) in Accra.
He observed that the move was part of an initiative to enable start-ups to plough back their profits into their businesses, expand and create more jobs in the country.
Although the government had seeded the National Entrepreneurship and Innovation Plan (NEIP) with $10 million, he said the fund was not enough to meet the huge demands, hence the need for additional funding to support young businesses.
Govt engages stakeholders
“We are discussing with stakeholders, including banks to help set up a special fund to support young businesses in the country,” the minister said.
He noted that the government was also encouraging stakeholders to provide the needed training and mentorship to young businesses throughout the value chain.
Mr Awal said the deal was expected to be sealed by the end of March this year to pave way for the fund to be established to augment the initiatives already introduced by the government to support SMEs.
“In fact, we want to skew the fund towards women with about 52 per cent benefits to grow their businesses. Persons who are challenged will also be given special treatment under the fund,” he said.
Mr Awal reiterated the government’s commitment to provide between one and three-year tax holidays for young businesses to make them more competitive within their initial stages.
The tour was to help the minister familiarise himself with the operations of these business and seek their views on challenges confronting their operations in order to formulate a policy to address those challenges.
The hubs included Impact Hub-Accra, ISPACE Innovation Hub and the Meltwater Entrepreneurial School of Technology (MEST) where the minister presented them with a model business plan manual each to guide their start-ups.
The minister was also accompanied by Mr Yaw Asamoah, the Chief Executive Officer (CEO) of African SME Organisation, the private sector implementation partner of the NEIP.
Business plan competition
The NEIP, working with the Africa SME Organisation, is running the business plan competition under the NEIP.
The competition received more than 7,000 applications from SMEs, most of them start-ups, between November 2, 2017 and December 10, 2017.
Participating SMEs in the competition benefit from business support, including hands-on business training being facilitated by a leading international business school, t