By Kofi Ahovi
Ghana has been advised to set up an SME bank to cater for the needs of the small scale sector to facilitate the growth of the sector, as it has been done in other countries like Korea.
The establishment of an SME bank has become necessary due to the inability of traditional banks to meet the needs of these SMEs who generally propel the growth of a country.
The call was made by a Korean delegation from the country’s SME sector at a workshop organized by the Ministry of Trade Industry, Private Sector Development and Presidential Special Initiative (MOTI, PSD&PSI) in collaboration with the Institute of Economic Affairs (IEA) and the Korean Development Institute at Shai Hills in the Greater Accra Region.
The delegation added that while government is considering the option of establishing an SME bank, it should select certain priority areas in the small and medium enterprises for development based on availability of resources.
According to Dr. Chun Seung-Hun of Korea Institute for Development strategy (KDS) prioritizing government’s support to SMEs would ensure better development of SMEs in the country, since the government can not support all enterprises that qualify as SMEs.
Other speakers advocated for the revision of the company’s code of 1963 to reflect the changing business environment facilitate the growth to the sector which would in turn facilitate the growth of the country
The purpose of the workshop, which was to enable the Ghana tap into the expertise of the Korean counterparts in respect to improving the growth of SMEs to facilitate national development, was on the theme “Building basis on SMEs development for sustained economic growth in Ghana.
The deputy minister of MOTI, Kwaku Agyeman Manu recounted some of the intervention of the government in support of the development SME in the country, such as the establishment of Micro and Small Loans Centre (MASLOC) and the Venture Capital Trust Fund (VCTF) passing of the credit reporting Act, etc but wondered why these interventions have not achieved their respective targets.
In Ghana, SMEs provide employment to 60% of the work force whilst contributing about 6% to GDP, 55% of employment in Canada, 70% of total employment in the European Union and at least 70% of private sector workforce in South Korea.
In addition to job creation SMEs help in wealth redistribution especially among low income groups. Unlike larger firms, SMEs tend to be widely dispersed reaching remote and marginalized settings, hence helping reduce the income gap between urban and rural areas.
In 1962, Ghana had a per capita of US$180 whilst that of Korea was US$100. Today whilst Ghana is hovering around US$4600, Korea has a per capita of over US$21,000.
Ghana has been advised to set up an SME bank to cater for the needs of the small scale sector to facilitate the growth of the sector, as it has been done in other countries like Korea.
The establishment of an SME bank has become necessary due to the inability of traditional banks to meet the needs of these SMEs who generally propel the growth of a country.
The call was made by a Korean delegation from the country’s SME sector at a workshop organized by the Ministry of Trade Industry, Private Sector Development and Presidential Special Initiative (MOTI, PSD&PSI) in collaboration with the Institute of Economic Affairs (IEA) and the Korean Development Institute at Shai Hills in the Greater Accra Region.
The delegation added that while government is considering the option of establishing an SME bank, it should select certain priority areas in the small and medium enterprises for development based on availability of resources.
According to Dr. Chun Seung-Hun of Korea Institute for Development strategy (KDS) prioritizing government’s support to SMEs would ensure better development of SMEs in the country, since the government can not support all enterprises that qualify as SMEs.
Other speakers advocated for the revision of the company’s code of 1963 to reflect the changing business environment facilitate the growth to the sector which would in turn facilitate the growth of the country
The purpose of the workshop, which was to enable the Ghana tap into the expertise of the Korean counterparts in respect to improving the growth of SMEs to facilitate national development, was on the theme “Building basis on SMEs development for sustained economic growth in Ghana.
The deputy minister of MOTI, Kwaku Agyeman Manu recounted some of the intervention of the government in support of the development SME in the country, such as the establishment of Micro and Small Loans Centre (MASLOC) and the Venture Capital Trust Fund (VCTF) passing of the credit reporting Act, etc but wondered why these interventions have not achieved their respective targets.
In Ghana, SMEs provide employment to 60% of the work force whilst contributing about 6% to GDP, 55% of employment in Canada, 70% of total employment in the European Union and at least 70% of private sector workforce in South Korea.
In addition to job creation SMEs help in wealth redistribution especially among low income groups. Unlike larger firms, SMEs tend to be widely dispersed reaching remote and marginalized settings, hence helping reduce the income gap between urban and rural areas.
In 1962, Ghana had a per capita of US$180 whilst that of Korea was US$100. Today whilst Ghana is hovering around US$4600, Korea has a per capita of over US$21,000.
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