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Harare Bureau

GOVERNMENT says it has held talks with entities such as the Empowerment Bank, Women’s Banks, Small and Medium Enterprises Development Corporation (SMEDCO), CBZ, Financial Securities Exchange (Private) Limited (FINSEC) and Norfund as possible fund managers for the National Venture Capital Fund.

A total of $500 million has been set aside by Treasury in the 2020 national budget for the establishment of a National Venture Capital Fund to finance start-up projects by the youths.

In a major development towards the establishment of the fund, the finance secretariat said steps have been taken to incorporate it as the National Venture Capital Company (NVCC), a private limited company wholly owned by the Government.

Said Secretary in the Ministry of Finance and Economic Development, Mr George Guvamatanga: “Empower Bank, Women’s Banks and SMEDCO are Government owned entities that have experience in aspects of venture capital as well as lending. The entities have shown enthusiasm to participate as partners of the fund. In this regard, resources will be set aside for these Government entities to spearhead support to the identified investee companies while the other processes are being put into place.

“As Treasury, we are calling on Empower Bank, Women’s Banks and SMEDCO to identify projects that are commercially viable which will yield desired returns to the Fund. We need to note that the resources will be exchanged for shares that will be held by the National Venture Capital Company on behalf of the Government.

“With regards to other fund managers, the ministry through the Steering Committee is assessing various proposals. Appraisal of the potential Fund managers and partners will be done and the envelope of resources will be apportioned accordingly.

“It is envisaged that the fund managers will be remunerated on the basis of performance of their portfolio. The model of the NVCC is evolving in nature. Once the company is well established, the investee company or other shareholders can buy out the Government shareholding for value. The revenues receivable by Government will be used to plough back into the fund.

“Government has also invited FINSEC to make a submission following previous engagements. A meeting was held where FIN SEC proposed a model that the fund could adopt. This is still under evaluation.”