By Kofi Ahovi
The banking sector in the country is gradually expanding with 27 banks currently operating, however, credit to small and medium scale enterprises (SMEs) is rather diminishing. To this effect, governments have established credit institutions like MASLOC among others to address this issue, yet the challenge still persists.
The Lenders and Borrowers Bill which was recently passed by parliament forms part of measures being put in place to improve the credit culture in the country.
To ensure that SMEs grow, banks would need to shift from short term loan facility to medium to long term loan facilities. This implies that the banks will have to take more risk to ensure that SMEs have enough capital to not only sustain their operations but also expand thereby creating more jobs.
This is where Eximguaranty Company Ghana comes in. Eximguaranty was set up to facilitate the flow of credit to SMEs by providing credit guarantees and general financial risk management solutions.
The objectives for establishing Exim include; assisting the banks and non-banking financial institution to extend credit facilities to borrowers who may have inadequate or no collateral, To provide internal and external guarantees to approved financial institutions in the disbursement of foreign credit lines. It also include the provision of mechanism through which agriculture products, (perishable and/or non-perishable) can be financed, coordinated and marketed and to provide an insurance cover for export proceeds.
The company ensures this by using innovative instruments and highly motivated staff while providing a return to its shareholders.
Exim guaranty has lately been exploring ways to enhance its capacity to provide comfort to lending and leasing companies in Ghana through expanding its network with international development finance institutions.
This drive was given a boost recently when Felicity Acquah, MD of the company was elected the West African delegate on the Executive Committee of the Association of African Development Finance Institutions at its congress in Dakar, Senegal.
Exim’s credit guarantee cover are designed to benefit SMEs in Ghana through impacting the banking and financial sector in Ghana under the Credit Guarantee Scheme, to enable them provide financing to SMEs with Exim’s Guarantee Covers, as well as enabling Ghanaian exporters access export pre finance facilities to execute export orders.
The sectors guaranteed by Exim includes; Agro-business and related activities (agro-processing, preservation of perishable products, export of nontraditional products, repairs and servicing of agricultural machinery and equipment, poultry and livestock farming, marine and fresh water fishing), Manufacturing Industry, Artisanal works, Service Industry including Tourism, Information technology, Medical; and Related Services etc, Firms engaged in road construction and civil works and Firms engaged in bonded warehousing services.
It also guaranteed existing SMEs operating in Ghana and owned by the private sector. Such enterprises/businesses need to be productive in nature with total fixed assets (excluding land) not exceeding US$ 2,000,000 or its cedi equivalent. Micro or Owner operated enterprises with total fixed asset (excluding land) not exceeding US$ 100,000 or its cedi equivalent.
In order to enhance the opportunity for small and medium-sized projects to obtaining the needed credit, Exim guarantees up to 75% of the outstanding balance for all loans.
The loan application is submitted by the borrower to the Bank/Lending institution which appraises the project and completes a prescribed Exim application form with the requisite information.
Financial Institution then forwards the completed application form to Exim which reviews the application thoroughly and then provides a response to the Lending Institution. Lending Institution then gives feedback to applicants (borrower).
The banking sector in the country is gradually expanding with 27 banks currently operating, however, credit to small and medium scale enterprises (SMEs) is rather diminishing. To this effect, governments have established credit institutions like MASLOC among others to address this issue, yet the challenge still persists.
The Lenders and Borrowers Bill which was recently passed by parliament forms part of measures being put in place to improve the credit culture in the country.
To ensure that SMEs grow, banks would need to shift from short term loan facility to medium to long term loan facilities. This implies that the banks will have to take more risk to ensure that SMEs have enough capital to not only sustain their operations but also expand thereby creating more jobs.
This is where Eximguaranty Company Ghana comes in. Eximguaranty was set up to facilitate the flow of credit to SMEs by providing credit guarantees and general financial risk management solutions.
The objectives for establishing Exim include; assisting the banks and non-banking financial institution to extend credit facilities to borrowers who may have inadequate or no collateral, To provide internal and external guarantees to approved financial institutions in the disbursement of foreign credit lines. It also include the provision of mechanism through which agriculture products, (perishable and/or non-perishable) can be financed, coordinated and marketed and to provide an insurance cover for export proceeds.
The company ensures this by using innovative instruments and highly motivated staff while providing a return to its shareholders.
Exim guaranty has lately been exploring ways to enhance its capacity to provide comfort to lending and leasing companies in Ghana through expanding its network with international development finance institutions.
This drive was given a boost recently when Felicity Acquah, MD of the company was elected the West African delegate on the Executive Committee of the Association of African Development Finance Institutions at its congress in Dakar, Senegal.
Exim’s credit guarantee cover are designed to benefit SMEs in Ghana through impacting the banking and financial sector in Ghana under the Credit Guarantee Scheme, to enable them provide financing to SMEs with Exim’s Guarantee Covers, as well as enabling Ghanaian exporters access export pre finance facilities to execute export orders.
The sectors guaranteed by Exim includes; Agro-business and related activities (agro-processing, preservation of perishable products, export of nontraditional products, repairs and servicing of agricultural machinery and equipment, poultry and livestock farming, marine and fresh water fishing), Manufacturing Industry, Artisanal works, Service Industry including Tourism, Information technology, Medical; and Related Services etc, Firms engaged in road construction and civil works and Firms engaged in bonded warehousing services.
It also guaranteed existing SMEs operating in Ghana and owned by the private sector. Such enterprises/businesses need to be productive in nature with total fixed assets (excluding land) not exceeding US$ 2,000,000 or its cedi equivalent. Micro or Owner operated enterprises with total fixed asset (excluding land) not exceeding US$ 100,000 or its cedi equivalent.
In order to enhance the opportunity for small and medium-sized projects to obtaining the needed credit, Exim guarantees up to 75% of the outstanding balance for all loans.
The loan application is submitted by the borrower to the Bank/Lending institution which appraises the project and completes a prescribed Exim application form with the requisite information.
Financial Institution then forwards the completed application form to Exim which reviews the application thoroughly and then provides a response to the Lending Institution. Lending Institution then gives feedback to applicants (borrower).
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