45 million dollar credit line for SMEs
Accra, May 10, GNA - Mrs Gifty Ohene-Konadu, Deputy Minister of Trade and Industry, on Wednesday said the Ministry's Small and Medium Enterprise (SMEs) and World Bank Group Project with a credit line of 45 million dollars would soon begin and called on SMEs to register their businesses so as to benefit from such schemes.
Mrs Ohene-Konadu was speaking at the launch of Ghana Journalists Association (GJA) Media Advocacy Project on the theme; "Using the Media to Promote Small-Scale Business Concerns" in Accra.
She said management staff was being recruited to oversee the disbursement of the Fund adding that other schemes to be included were the Venture Capital Fund and an Italian credit line.
The Deputy Minister said with finance being one of the banes of the Sector, efforts were ongoing to improve SMEs access to credit, adding that the Export Development and Investment Fund had been in place for sometime now, providing credit to export oriented enterprises including SME at a concessionary interest rate, which at present was 12.5 per cent per annum.
She said small-scale businesses in Ghana constituted the bulk of the enterprises in the country and together with medium-scale enterprises they accounted for about 90 per cent of enterprises in the system, contributing to 60 per cent of employment but that their contribution to Gross Domestic Product (GDP) was only about six per cent.
Mrs Ohene-Konadu noted that the potential of the SME Sector was not being fully realised since it should be contributing a lot more to the attainment of national goals of becoming a middle income country with per capita income of 1,000 dollars by 2015. She urged the SMEs to create more employment, generate more foreign exchange and contribute to the accelerated transformation of rural areas into the economic mainstream with attendant benefits for poverty reduction.
Mrs Ohene-Konadu said inadequate financing, obsolete machinery and equipment, weak management, low skills and unfair competitions were some of the reasons for the SMEs not maximising their potentials. She said though the problems of SMEs were many they were the cornerstone for accelerated development and growth and congratulated the GJA for launching the Project to promote the SMEs sector with a view to moving the sector forward.
She said "to make success we need to understand the SMEs peculiar circumstances and needs to be able to address them", adding that banks until recently were averse to making loans available to SMEs because they were perceived as risky with no track records, no collaterals and weak management.
She said things were changing for the better with the creation of SME Desk in some banks to nurture SMEs to become viable clients, saying, however, that the process was compounded by lack of information flow and facilities might be available but these were not communicated to SMEs to feel confident to prepare and access them. She said to survive in the global economy stand alone approaches should give way to group approach. Mr Hubert Dake, Tema Branch Manager of Ecobank Ghana Limited, said there was a facility in the Bank to provide SMEs with credit to boost their businesses and called on business operators to contacts their bank managers for more information and assistance.