Impact of venture capital financing on small and medium enterprises in Ghana: the case of Maslenda Fruit Processing Limited

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Venture capital is seen as a major financing method for small and medium scale enterprises. The study looked at the Impact of Venture Capital Financing as an alternative success on SMEs in the Kumasi Metropolis. For some years now, there are efforts by successive Governments to improve on the performance, growth and sustainability of SMEs and had led to the promulgation of different policies and act including the Venture Capital Fund to assist SMEs. 100 questionnaires were administered to Manager/SME owners operating within the Kumasi Metropolis with focus on Maslenda fruit and water processing limited using convenience sampling techniques. It was generally observed that SME’s prefer self-financing and occasionally received support from financial institutions. Analysis was computed with SPSS version 16 and Microsoft excel. Majority of the SMEs were however not aware or had little knowledge about Venture Capital Financing as an alternative to financing. Firms that had benefited from Venture Capital Financing stated that they did not only receive capital inflow but was accompanied with monitoring, technical skills and expertise, access to management, marketing and distribution and reputation for attracting further finance. The study concludes that though few of SMEs remained optimistic about venture capital financing most them were ‘uncertain’. The study recommends that SMEs need to recognize the potential advantages of seeking equity finance from venture capital. Venture capital fund managers can do much to encourage venture capital investment from corporate investors. Government and policy makers should play a dual role as both facilitators and educators in encouraging the venture capital process.
A thesis submitted to The Department of Economics in partial fulfillment of the requirements for the award of Master of Science in Economics