EDAIF earmarks GH¢2m for startups owned by graduates

Business News of Tuesday, 10 February 2015

Source: Graphic Online

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The Export Trade, Agricultural and Industrial Development Fund (EDAIF) has set aside GH¢2 million to support graduates with bankable business concepts to enable them start their dream businesses.

This initial financing, targeted at 20 young graduates, is expected to contribute to reducing graduate unemployment and scaling up job creation, especially new jobs, to absorb the high number of graduates.

The Graduate Enterprise Development Initiative (GEDI) is to nurture and groom young graduates with bankable business ideas into successful business moguls.

It will provide financial and technical resources to budding entrepreneurs with the aim of creating jobs for the teeming unemployed graduates from the country’s tertiary institutions.

According to EDAIF, the first phase of the initiative will see each of the 20 young graduates receiving GH¢100,000 funding and they would, in addition, be linked to successful businessmen and women in their chosen business areas to be mentored.

The export fund, which would be converted into an Export-Import Bank (EXIM) at the end of this year, wants the proposed business ideas to be in the areas of development and promotion of export trade with the focus on non-traditional exports, agro-processing and industrial development.

“The business must also be capable of employing at least five persons and show commitment towards statutory payroll deductions,” EDAIF said in a statement.

Analysts have, however, wondered why EDAIF is wading into the financing of startups, when there is already a Venture Capital Trust Fund and its chain of financiers which had better capacity to do the risky business of start up financing.

They argued that it will be much better if EDAIF rather channelled the money through the Venture Capital Fund which had so far proven its mettle to leverage the funds to support such small companies that cut their teeth.

The Venture Capital Trust Fund (VCTF) which was established in 2004 through an Act of parliament is mandated to provide low-cost financing to small and medium enterprises (SMEs) to enable them expand, create wealth and jobs.

This it does by providing credit and equity financing to eligible partners and Venture Capital Finance Companies to support SMEs.

The fund started with seed funding of GH¢22.4 million from the government as a revolving fund that operates in priority sectors such as agriculture, pharmaceuticals, ICT, tourism and energy.

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