13.08.2004 Business & Finance

Use Of Family Members Could Collapse Firms

By George Ernest Asare
Listen to article

The Corporate Manager of the Merchant Bank in Kumasi, Mr William Amoafo,has advised Small and Medium Enterprises (SMEs) against resorting to the use of family members to manage their businesses without regard to their qualifications.

He said experience had shown that most potentially productive industries collapsed because family members who did not have the requisite skills were employed to man strategic positions in the companies.Mr Amoafo gave the advice at a seminar organised for SMEs in Kumasi to sensitise them to the need to cultivate the culture of doing business through the banks to reduce risks.

He said the effective management of such enterprises required people with the requisite qualifications. The seminar, sponsored by the Association of Ghana Industries (AGI), in collaboration with the Merchant Bank, was on the theme, “improving the SMEs through banking culture”.Mr Amoafo gave the assurance that the focus of the bank was to assist SMEs in the country to expand their business rapidly by making it easy for them to access credit facilities that would make it possible for their businesses to grow into big time multi-national companies.

That, he noted would accelerate the growth of the economy to raise the standard of living of the people. He expressed concern about the lack of saving culture among some business enterprises and stressed that such attitude did not promote healthy relationship between the banks and the SMEs.

“The first step in building banking culture is to pass all your business transactions through the banks in order to build a good track record”, he stressed, adding, “this would also help us to appreciate all your problems and advise you where necessary”.He said of equal importance was the need for them to keep proper records of all their business transactions.

That, he explained, did not only make it possible for the management to know the financial position of the company, but also put them in good stead when accessing loans from the banks.He advised them to repay their loans on time to enable other distressed companies source similar facilities to accelerate the growth of SMEs in the country.

The Ashanti Regional Manager of AGI, Ms. Harriet Amoah, said their primary objective was to sensitise SMEs to develop good rapport with the banks so as to understand the process of sourcing loans to develop their companies. She said through frequent interaction between the SMEs and the banks, the perception among SMEs that there were too much bureaucratic tendencies in accessing loans from the banks would also be reduced.

ModernGhana Links

Join our Newsletter