Establish dev’t bank for SMEs - Prof. Adei

A Former Rector of the Ghana Institute of Management and Public Administration (GIMPA), Prof. Stephen Adei, has called on the government to establish a special development bank that will support the development of small and medium-scale enterprises (SMEs).

He said the SMEs development bank should be created with a seed capital of about US$100 million to ensure that all aspects of the growth of SMEs were covered.

Prof. Adei noted SMEs were faced with exorbitant interest rates and charges from financial institutions which placed them in very disadvantaged positions in the domestic and international market.

In line of this, to increase support for SMEs in the country, the Chief Executive Officer of Universal Merchant Bank (UMB), Mr John Awuah, has said his outfit has an elaborate plan to help develop and increase support for small and medium-scale enterprises to enable them to grow.

In this direction, he said, the bank was working on establishing two centres in Accra and Kumasi to facilitate the sustenance of the small and medium businesses.

“By this time next year, we would be talking about two well-established centres, what we are going to call the business banking centres, one in Accra and the other in Kumasi. These centres are going to be predominantly handling transactions of small and medium-scale enterprises,” he said.

In doing business everywhere, meeting quality standards requirements is a necessity and a catalyst for general acceptance and association by customers or consumers.

Quality standards serve as a guide to producers and services providers to ensure that businesses do not commit grievous mistakes before starting all over again.

Standards are sets of requirements, specifications, guidelines or characteristics that can be used consistently to ensure that materials, products, processes and services are fit for their purpose.

Business success, therefore, depends on how businesses perform at every level of the organization.

In Ghana, standards are developed by the GSA in collaboration with stakeholders. They are based on consensus building after which they are gazetted for use.

Generally, large-scale businesses are said to be standards compliant and therefore reap the benefits of standards for their operations.

However, the challenge has been with the small and medium scale enterprises (SMEs), many of whom do not adhere to standards and are mostly not registered which makes it difficult to track them.

As calls for support to SMEs are increasing, an advice has been given to SMEs managers not to compromise on quality standards.

The Ghana Standards Authority (GSA) has blamed the inability of SMEs to produce goods to international quality benchmarks to their failure to abide by standards.

The Head of Public Relations Department at the GSA, Mr Kofi Amponsah-Bediako has said using standards in business operations offers a set of powerful business and marketing propositions for organisations of all sizes. Their application enhances performance and risk management, while making operations more efficient and sustainable.

“Businesses that make use of standards are likely to ensure quality of their products such that they would be acceptable everywhere. It will be easy for them to break into larger markets whether local or international,” he said.

Mr Amponsah-Bediako added, “Businesses today simply cannot afford to take an improvised reactive approach to risk. Using standards can help them to identify their risks and minimise them.”

“It is even difficult to get statistics on them. We would say that when it comes to small businesses quite a substantial number do not use standards and that’s why they have problems with the quality of their products,” he said.

Subsequently, for Ghana’s economy to boom, Prof. Adei entreated the state actors to ensure an improvement in the overall national attitude and culture; the micro-economic environment and the removal of all that had a negative impact on national competitiveness in dealing with the constraints SMEs faced in the country.

Therefore, he urged the ministries to focus on developing activities of SMEs in their sectors as the Ministry of Trade and Industry was doing in promoting the activities of SMEs in Ghana, adding that “our economy’s survival is based on revamping the SMEs in the country”.

Prof. Adei explained that even though SMEs did not operate in the world of their own and, therefore, shared the same environment with other economic agents, the former faced the challenges of the consequences of the present economic conditions in Ghana.

“The SMEs are faced with difficulties in attracting the attention of policy makers, bankers as well as accessing functional expertise and business support, making them more vulnerable to the macro socio-economic conditions,” he noted.

Prof. Adei, therefore, called on policy makers to consider instituting a five-year tax holiday for SMEGA to allow them to build solid foundations for their businesses.

He was speaking at the second SMEs Ghana Awards (SMEGA) organised in Accra last week to celebrate and recognise the achievements of SMEs in Ghana.

The awards night was on the theme: “Advancing SMEs through ICT applications.”

The Greater Accra Poultry Farmers Association (GPFA) emerged the overall winners of the night, while the High Impact Personality (HIP) award went to an entrepreneur and Chief Executive Officer (CEO) of the National Medium-Term Private Sector Development Strategy (PSDS II), Mr Joe Tackie, for the tremendous contribution he had provided to members in the field of mentoring, tutoring and consultancy services.

Other categories of awards included the Agricultural, Industrial and Services sectors.

In a speech read on his behalf, the Minister of Trade and Industry, Dr Ekwow Spio-Garbrah, urged members of SMEGA to continue their contribution to the country’s economy through national output, export and also by achieving diverse socio-economic objectives for employment and enhancing the entrepreneurship provided by the industries.