SMEs urged to strategise to overcome difficulties
THE Director of the Centre for Entrepreneurship and Small Enterprise Development (CESED) at the School of Business, at the University Of Cape Coast (UCC), Dr Mrs Mavis Serwah Benneh- Mensah, has advised micro and small business owners and entrepreneurs to collaborate with other entrepreneurs as a strategy to overcome the difficulties imposed on them by the coronavirus (COVID-19) pandemic.
She noted that even before COVID-19, SMEs were vulnerable and needed protection in terms of finances, markets and business development processes.
“It is necessary for small businesses to engage in cost restructuring and embrace continuous entrepreneurial education to survive and remain relevant,” she said during the 3rd session of the e-seminar series organised by the UCC.
It was on the topic: “Coronavirus Pandemic: Implications for Entrepreneurs and Enterprise Development.”
Dr Benneh-Mensah explained that the mandate of CESED was to provide entrepreneurial training and strengthen SMEs to play a critical role in the economy, and expressed the willingness of University’s Incubator to assist entrepreneurs proving research-based TIPS to survive.
The Dean of the UCC School of Business, Prof. John Gatsi, corroborated that before the COVID-19, SMEs and entrepreneurs faced challenges in accessing finances including trade finance from various sources to finance their creativity, ideas and businesses.
He noted that some SMEs were not in position to meet their repayment obligations to financial institutions, thereby contributing to non-performing loan profile of financial institutions.
“COVID-19 pandemic has increased the risk of access to finances by entrepreneurs and small businesses. Available and affordable access to different sources of finances to incentivise entrepreneurs and enterprises to scale up their activities to create new businesses and expand existing ones have become crucial demanding innovative and sustainable funding solutions,” he stated.
He said entrepreneurs could reach their ultimate entrepreneurial potentials when the right environment was created.
Consequently, he called for reshaping of the entrepreneurial environment to avoid temptation that, “this is not the time to invest in innovation, new ways of doing business and research and development.”
Entrepreneur’s take
An entrepreneur, Mr Saka Addo-Mensah, highlighted some of the challenges he and others were facing in the sector.
He said rental properties were now empty because foreigners had lost money and could not travel to the country as a result of closure of borders and airports, coupled with social distancing protocols.
He said before the coronavirus pandemic, face-to face tour of the rental properties was the norm but now they have to invest in virtual tour of their properties to attract investors.
His interest, he said, lay in identifying opportunities provided by the COVID-19 and not overly fixated about profits but safety as he had lost about 30 per cent of business due to the pandemic.
The Head of Department of Public Administration from the University of Fort Hare, South Africa, Prof. Ogo Nzewi, provided a policy perspective to entrepreneurship and small enterprises.
She explained that globally, tax reliefs, social reliefs and small business fund have been provided as intervention.
However, in many cases these interventions have been slow in coming and discriminate against the very people and businesses that are in dire need of the support.
“So many businesses were dead before the pandemic. All these businesses are in line competing with those that were destroyed by the pandemic and unfortunately adverse selection has taken place already,” she noted.
Prof. Nzewi said the inequality in access to these interventions to especially the women who are in need could be traced from past policy structures or legacies where policy benefits are distributed based on factors such as political affiliation and what political authorities expect from groups that benefit from the intervention.
The Deputy Director of the Sekondi-Takoradi Chamber of Commerce, Mr Nii Kpani, explained that the coronavirus pandemic was affecting demand of many businesses and said those that embraced virtual tools for their work were able to cope while those who were not able to embrace virtual tools were finding it difficult.
On the GH¢600 million government intervention for SMEs, Mr Kpani encouraged small businesses who were facing challenges in completing the forms to contact the Chamber of Commerce to support them to complete the forms.
He advised entrepreneurs to incorporate technology into their business processes and build financial buffers to lower liquidity risk during times of difficulties.