Graphic Business/Stanbic Bank forum to discuss SME funding on August 6
The Graphic Business, in partnership with Stanbic Bank Ghana, will on August 6, 2019 hold another edition of its quarterly breakfast business meeting at the Labadi Beach Hotel in Accra.
The event, which will be the second edition for the year, is expected to bring together experts from academia, policy think tanks, and civil society organisations (CSOs) to fashion out how the country can build an equity fund to address the finance challenges of SMEs.
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As a result, it will be held on the theme: “Building a national equity fund to support small and medium enterprises”.
SMEs remain the major avenue of employment and can absorb a chunk of the unemployed youth if supported, as all over the world SMEs are increasingly being recognised as productive drivers of economic growth and development.
SMEs are believed to contribute about 70 per cent to Ghana’s Gross Domestic Product (GDP) and account for 92 per cent of businesses in the country.
Despite the immense contribution of SMEs to the growth of the economy, the sector still faces a myriad of challenges which have stifled growth in the sector and in effect slowed down the growth of the economy.
Age-old challenge
One of such problems, and perhaps the most pertinent over the years, has been the difficulty and near impossibility of having access to finance, especially fresh capital to start up or expand an existing business.
This is despite the fact that in all sectors of the economy, SMEs dominate and lead the force of private sector contribution to growth by paying taxes and providing employment for the country’s workforce.
Being a private sector dependant country, it is assumed that the growth of SMEs could spark growth in the economy and reduce the burden on the government to employ the teeming unemployed in the country.
Unfortunately, the country presently cannot boast of a national equity fund as it pertains in some other countries all over the world.
In these countries, mostly in the developed world, the presence of such equity fund has been the springboard for the growth of SMEs.
Aside providing the needed capital which is the fuel that drives businesses, the fund also provides the framework for financing SMEs.
Previous attempts
Ironically, the closest the country has come to establishing and operating such a fund was the setting up of a venture capital fund which was to provide capital for SMEs.
This fund has, however, been insufficient to address the funding problems of SMEs, prompting calls for the need to set up a national equity fund to support the sector.
The sector has seen growth in the number of companies registered over the years but it is difficult to see these established businesses grow from one stage to the other largely because there are no deliberate strategies in place at the national level to help SMEs grow from one stage to the other.
Framework
The establishment of a national equity fund should, therefore, provide the framework for financing SMEs in the country to support growth in the sector.
With employment in the public sector dwindling due to huge pressure on government finances,coupled with exponential growth in the national population — with its attendant increase in graduate unemployment, the SME sector presents glorious opportunities to reduce the country’s high unemployment rate.
If properly supported to grow, SMEs could provide employment for all the graduates who leave the various tertiary institutions each year looking for nonexistent government jobs.
To register for this event, please complete this form