Banks urged to do more to enhance growth of SMEs

Takoradi, June 16, GNA - Mr Peter Mac-Manu, Western and Central Regional Chairman of the Association of Ghana Industries (AGI) has noted that the general categorisation of Small and Medium Enterprises (SMEs) by the banks in business transactions had not helped business growth. He said such general categorisation had crippled many industries and private sector initiatives with its resultant negative effect on the economy.

Mr Mac-Manu said these when he led a five-member executive of the AGI to pay a routine visit to some financial institutions operating in Takoradi. The visit was on the theme: "Relationship of the financial institutions and their support to industrial sector of the regions, - the way forward". He said demands on SMEs by some banks usually made it difficult for such industries to access credit to enhance their expansion.

Mr Mac-Manu urged management of the banks to re-assess each industry based on its own merit and offer them the needed financial assistance. He said there were 300 AGI members in the two regions and the banks could have great opportunities working with them for their mutual benefits. Mr Charles Ofori, General Manager, Corporate Banking of the Merchant Bank, said the bank had engaged the services of a consultant to work out modalities to enhance collaboration with SMEs. He alleged that many SMEs were not transparent with the banking institutions. They also did not keep proper records on their operations. Mr Ofori said non-payment of loans by SMEs was a major problem confronting the bank but stressed that advisory services had been created to assist SMEs with their business plans, growth and human resource development.

Mr Prosper Amewu, Manager of Amalgamated (Amal) Bank said the SMEs were the most risky group of clients that banks deal with. He said Amal Bank dealt mainly with manufacturers, processors and had provided guarantee for several SMEs operating in the country. Mr Amewu charged members of the AGI to be trustworthy, adding, "owning a contract or business plan alone does not guarantee easy access to credit. He appealed to the AGI to guarantee its members to enable the banks to feel safe in granting them credit.

At the ECOBANK, Mr. Kwesi Anokurang-Budu, Branch Manager said the lack of openness among SMEs coupled with the misapplication of credit facilities were some of the problems that banks faced in granting credit. Such credits, which should go into the expansion of businesses and enhance their operations, were rather diverted for private use, he charged.