Micro financing identified as the right recipe for development

Sogakope, (V/R) Oct. 8, GNA - Lack of micro credit opportunities for the medium and small enterprise (SME) sector has been identified as a major obstacle to the country's poverty reduction efforts. Mr. Yaw Barimah, Eastern Regional Minster, making the assertion on Friday, was of the view that with the needed capital base, the sector, which now engages 70 percent of the Ghanaian work force, would have expanded to employ more and increase benefits across board. "For lack of credit, our SMEs are unable to expand beyond their small holdings to create job for the teeming unemployed youth in the country," he said.

Addressing a joint Eastern and Volta Regions chapter durbar to commemorate this year as the United Nations International Year of Micro Credit at Sogakope, Mr. Barimah said micro-credit access for SMEs is the best alternative to help them raise the minimum start-up capital as the formal financial institutions refuse them assistance duet to their weak capital base.

The theme for the ongoing celebrations, which would be crowned with a national durbar at Amasaman, Greater Accra, in November, this year, was "Micro-Credit: A Tool for Job and Wealth Creation." It was meant to raise awareness about the relevance of micro finance in poverty alleviation and enhance existing programs that support the development and provision of sustainable financial services, on the path to ensuring access to quality financial services to at least 50 percent of all households by 2015.

Mr. Barimah said with the shifting of the country's industrial paradigm from state-owned enterprises to a private sector-led focus, the position of SMEs as a vital industrial development hob has become more pronounced, requiring a limitless accessibility of capital for them to expand and perform.

"Today, family group s and individual artisans engage in activities such as food and cash-crop production, metal fabrication, wood processing and leather tanning, but these enterprises often fold up due to the absence of credit-accessibilty", he added. He was hopeful that the growing interests in micro financing by institutions and schemes such as Co-operative Credit Unions Association (CUA), Susu Collectors Union, Rural Banks Community-Development Program, District Assemblies Common Fund, Poverty Reduction and other social relief schemes would go a long way in off setting problems with micro credit.

Mr. Joseph Kwaku Nayan, deputy Volta Regional Minister, noted that micro finance helps in improving resource allocation, market promotion, adoption of better technology, as it also enables the poor to gradually build assets by enhancing their income capacity for economic growth and development.

He said solely, established financial entities such as the Barclays Bank, which has just introduced a non-collateral 50 million cedis micro loan, are coming on board in micro financing as the traditional players, including CUA also increase their assets. Mrs. Christy Ahenkora Banya, Program Analyst, United Nations Development Program (UNDP), calling for an all-inclusive effort to build micro financing services, said the UN Millennium Development Declaration identifies it as the bullet for dealing with worldwide poverty as pro-poor development agenda in the past failed to meet targets. Nana Opare-Gyan, Acting Chief Executive, Association of Financial NGOs, said 60 such organizations with local and international inks were currently offering micro credit opportunities for the SME sector in addition to financial skills and management enhancement schemes for them.

Ms. Cate Aku Aglah, Sogakope District Chief Executive (DCE), said the Assembly has a major program giving financial support for the youth and the poor in the area to go into projects including bamboo cultivation and clam production to reduce want among them.