World Bank, IFC confer with BEIGE Capital on SME financing
Staff of World Bank and International Finance Corporation (IFC) have paid a courtesy call on the Chief Executive Officer (CEO) of BEIGE Capital, Mr Mike Nyinaku, to hold discussions around how financial institutions support small and medium enterprises (SMEs) in the country.
Advertisement
The discussions centred on how those in the informal sector of the economy could contribute effectively to the growth of the national economy, as well as how the SMEs could be assisted to access credit in order to make them competitive.
During the discussions, Mr Nyinaku stressed that it would not be practicable for Ghana to succeed in achieving financial inclusion if it neglected the informal sector.
He stated that while transaction process enablers such as mobile money was supporting the drive for a cashless economy, even at the micro level, access to credit would remain a big barrier to achieving total financial inclusion.
He considered the country’s legal system as one of the major barriers inhibiting access to credit, saying in spite of the introduction of the Lenders and Borrowers Act, the time it took to secure judgement, coupled with the difficulty in executing judgments in cases of loan defaults made the provision of credit to the informal sector unattractive.
“As a people, we have been socialised in a way that rejects any effort at debt recovery. It is interesting to note that in some parts of Ghana you can’t execute an item of collateral because no one in that part of the country would want to buy that item,” he stated.
Mr Nyinaku attributed the success of BEIGE Capital Savings and Loans to its ability to adapt and customise international credit delivery practices to suit the unique circumstances of Ghana’s informal sector.
In his words, “it’s not always the case that there are bad borrowers, but sometimes there are also bad lenders.”
The BEIGE Group CEO expressed the willingness of BEIGE Capital to engage the IFC on any potential partnership that would inure to the benefit of both institutions.
The representatives of the World Bank at the meeting were a Senior Operations Officer, Kaliza Karuretwa, a Private Sector Development Specialist, Anne Ytreland and the Director for Growth Solutions Development LLC, Gaiv Tata.