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02.11.2005 Business & Finance

Develop sharper techniques and products - Bartels

By GNA
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Accra, Nov. 2, GNA - Mr Kwamena Bartels, Minister of Private Sector Development and Presidential Special Initiatives on Wednesday charged commercial banks to develop innovative, self-liquidating finance structures linked to future cash flows to fund the growth of the private sector.

He also urged them to examine their operations and work to ensure that they invest in risk analysis management capacity, increase knowledge about their sector and adopt appropriate post disbursement-monitoring processes.

Mr Bartels was speaking at the commissioning of a new office of the Eximguaranty Company Ghana Limited in Accra. He noted that commercial banks as well as non-bank financial institutions must also as a matter of necessity improve on relationship management and database of their clients while contributing to common bad credit database or credit reference exchange.

Eximguaranty Company assists banks and non-bank financial institutions to extend credit facilities to borrowers who may have adequate co-collateral. It also provides internal and external guarantees to approved financial institutions in the disbursement of foreign credit lines among others.

Mr Bartels noted that the need for a growing dynamism and expansion of the private sector, called for a lot more to meet the emerging challenges in the industry.

He was happy that at least the nation had been able to create an institution that would provide secure guarantee for companies, adding that the task of fuelling economic growth and spreading prosperity could best be handled by enterprising citizens working through establishment of their own enterprises.

He said government was strengthening the rural banking network, adding that the act for the venture and private equity funds had been passed awaiting active implementation. On land ownership, Mr Bartels said the administrative processes were being reformed and fast track court for commercial cases had been established.

He promised good coordination between his ministry and other ministries to see the dream of companies requiring such services and funding to materialize.

Mr Emmanuel Asiedu-Mante, First Deputy Governor of the Bank of Ghana commended the management of Eximguaranty Company for their tenacity and bringing the company to such a level saying it used to be a department at the Bank of Ghana.

He urged financial institutions to partner more with Exim to get appropriate leveraging in risk exposure for their clients, saying, Exim's business was intervening in risk sharing after the lender was perceived to have taken the right measures.

Mr Asiedu-Mante also urged financial institutions to have policies to support the management of operational risks inherent in their lines of business to make them secure.

Mrs Felicity Acquah, Managing Director of Eximguaranty said the company issued 242.7 billion cedis between 1994 and September 2005 with a total of 1,070 guarantees.

"A sectoral analysis between January to September 2005 shows 60 per cent of guarantees going to construction, 31 per cent to the non-traditional export sector while agriculture, services and manufacturing had three per cent."

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