‘Give SMEs collateral-free credit’
The President of the Emerging Markets Invest (EMI) Group, Dr Komi Klu, has asked the government to setup a credit guarantee fund that will help small and medium enterprises (SMEs) to get access to collateral-free loans from financial institutions in the country.
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He explained that unlike Ghana Export Import Bank (Ghana EXIM), which focuses on businesses operating in the export end of the market, a credit guarantee fund was needed to help enable SMEs to get access to greater financial support to expand their operations in Ghana.
Dr Klu, who mentioned this to the GRAPHIC BUSINESS at the launch of SME Ghana Awards (SMEGA) on June 20 in Accra, said the introduction of such funds were crucial for the survival of the SMEs in the country.
“We believe that the government giving financial support in the form of grants to SMEs is not the best practice of facilitating their growth,” he said.
According to him, to secure funding for their operations; SMEs needed to make themselves more attractive to secure funding outside the country.
“Most SMEs in Ghana are not bankable, this is because they do not have the right structures in place to attract potential investors into their operations,” he said.
To reverse the trend, he advised SMEs to imbibe the act of corporate governance in their operations in order for them to penetrate the international market and compete with other firms.
He observed that the economy could attract high value investments if it was able to empower its local entrepreneurs to match the capacities of potential external investors.
He said the country could only see a significant growth in the economy if the SME sector was given the needed support to grow.
SMEs to drive growth agenda
A Director at the Ministry of Trade and Industry (MoTI), Mr Papa Bartels, revealed that the government would use SMEs in the country as a nexus to grow the economy.
“It will do this by facilitating their access to medium and long-term capital that will enhance their growth,” he said.
Mr Bartels said the initiative was part of efforts by the government to make the private sector more vibrant and competitive.
“It is not only the facilitation of long-term capital that we intend to provide; we are also looking at other pillars of profitable growth indicators such as marketing support, infusion of new technology, and managerial support,” he added.
He said the government had taken steps to equip SMEs with the right resources in order to unearth their pillars.
That, he said, was necessary to sustain the growth of businesses operating in that segment of the economy.
“I will like to assure you that the government is fully committed to creating an enabling and working environment to help SMEs to promote their products and services,” he said.
“The most important thing is for the private sector to appreciate and recognise that the government is committed to making sure that the private sector survives and leads the process of transformation and that is why we are very happy about this initiative,” he added.
—GB