The Global Executive opinion survey recently conducted by the Association of Ghana Industries {AGI} identified access to Finance as a major challenge to SMEs in Ghana. A suggestion has also been made for the establishment of an SME bank; Kofi AHOVI takes a look at how this could change the state of small businesses in the country.
Opinions have been expressed by several economists about the need to financially support small businesses which have been identified as the engine of growth.
These opinions were made on the grounds that small business in Ghana account for over 80% of the country’s manufacturing sector and employs 53% of persons engaged in the sector, as against the large scale businesses which employ 34% and constitute only 1% of manufacturing sector.
Though some credit facilities have been provided to support small businesses in the past, they are woefully inadequate, and in cases where they are adequate those who qualify are unable to access them due to stringent requirements. Hence SMEs are sidelined.
Apart from creating 60% to 80% of the net new jobs, SMEs are highly involved in innovative activities, which enhance worker productivity and leads to increased economic output.
To address this issue, a Korean delegation recently suggested to the government the need to establish an SME bank to cater for the needs of the sector, as was done in their country some time back.
The bank when set up would support innovative research and development and commercialization of new products and services by viewing SMEs as the strategic backbone of the Ghanaian economy and would be committed to working with them while they realize their full potential, and turn knowledge and innovation into strategic opportunities, jobs and prosperity for all Ghanaians.
The bank would be the leading bank for developing and strengthening competitiveness of Ghanaian SME entrepreneurs, in the drive towards a strong and sustainable growth of the Ghanaian economy, with high-quality services, good governance, efficiency, and financial stability.
Again clues could be taken from the SME bank of Thailand which works in four areas; namely incubation, resourcefulness, speed and transparency.
I= Incubation: is when the SME Bank provides both pre-lending and post-lending business incubation services to SMEs, with an aim to strengthen the entrepreneurs and enable their businesses to achieve sustainable growth.
R = Resourcefulness: it strives to be a learning organization, dedicated to enhancing staff’s all-round knowledge and skills as "SME Development Officers" who are not only well versed in business knowledge but also of great caring and service-minded personality.
S = Speed: For faster and more convenient service to customers, SME Bank has extended its debt-repayment channels through all post offices throughout the country. New instruments of information technology have been employed to enhance working processes and systems.
T = Transparency: the bank is committed to good governance, attaching great importance to proper and transparent procedures. In addition to the White Bank channel, customers are welcome to follow-up progress directly.
The key factors driving the Thailand SME Bank to accomplish its missions is properly communicating both within and outside the organization. For internal communication, two monthly publications have been put into circulation. The newsletter “Around SME BANK” provides news of current happenings and a channel for employees to express their opinions. The “Heart to Heart” monthly letter is the medium they use to communicate policy and messages from top management to staff at all levels.
SME Bank has come up with five new loan schemes specially designed to help different types of small- and medium- scale enterprises flourish in the years ahead. They are; SME Professional, SME Start-Up, SME Procurement, SME Franchise and SME Global.
The SME Professional loan aims at giving financial assistance to professionals like doctors, consultants and pharmacists, who had received good response from the market
The SME Start-up caters for SMEs entering into any start-up project ready for commercialisation, while SME Procurement is a pre- and post-contract implementation financing for vendors who have already secured contracts, especially with government-linked companies (GLCs).
SME Franchise offers loans to SMEs involved in the franchise industry while SME Global focuses on export-oriented companies that have linkage with strategic partners for global coverage.
The establishment of this bank would provide the needed financial support for SMEs to move the country forward just as it did to KIA in Korea, which started with the manufacturing of bicycle then proceeded to the manufacturing of automobiles.
Opinions have been expressed by several economists about the need to financially support small businesses which have been identified as the engine of growth.
These opinions were made on the grounds that small business in Ghana account for over 80% of the country’s manufacturing sector and employs 53% of persons engaged in the sector, as against the large scale businesses which employ 34% and constitute only 1% of manufacturing sector.
Though some credit facilities have been provided to support small businesses in the past, they are woefully inadequate, and in cases where they are adequate those who qualify are unable to access them due to stringent requirements. Hence SMEs are sidelined.
Apart from creating 60% to 80% of the net new jobs, SMEs are highly involved in innovative activities, which enhance worker productivity and leads to increased economic output.
To address this issue, a Korean delegation recently suggested to the government the need to establish an SME bank to cater for the needs of the sector, as was done in their country some time back.
The bank when set up would support innovative research and development and commercialization of new products and services by viewing SMEs as the strategic backbone of the Ghanaian economy and would be committed to working with them while they realize their full potential, and turn knowledge and innovation into strategic opportunities, jobs and prosperity for all Ghanaians.
The bank would be the leading bank for developing and strengthening competitiveness of Ghanaian SME entrepreneurs, in the drive towards a strong and sustainable growth of the Ghanaian economy, with high-quality services, good governance, efficiency, and financial stability.
Again clues could be taken from the SME bank of Thailand which works in four areas; namely incubation, resourcefulness, speed and transparency.
I= Incubation: is when the SME Bank provides both pre-lending and post-lending business incubation services to SMEs, with an aim to strengthen the entrepreneurs and enable their businesses to achieve sustainable growth.
R = Resourcefulness: it strives to be a learning organization, dedicated to enhancing staff’s all-round knowledge and skills as "SME Development Officers" who are not only well versed in business knowledge but also of great caring and service-minded personality.
S = Speed: For faster and more convenient service to customers, SME Bank has extended its debt-repayment channels through all post offices throughout the country. New instruments of information technology have been employed to enhance working processes and systems.
T = Transparency: the bank is committed to good governance, attaching great importance to proper and transparent procedures. In addition to the White Bank channel, customers are welcome to follow-up progress directly.
The key factors driving the Thailand SME Bank to accomplish its missions is properly communicating both within and outside the organization. For internal communication, two monthly publications have been put into circulation. The newsletter “Around SME BANK” provides news of current happenings and a channel for employees to express their opinions. The “Heart to Heart” monthly letter is the medium they use to communicate policy and messages from top management to staff at all levels.
SME Bank has come up with five new loan schemes specially designed to help different types of small- and medium- scale enterprises flourish in the years ahead. They are; SME Professional, SME Start-Up, SME Procurement, SME Franchise and SME Global.
The SME Professional loan aims at giving financial assistance to professionals like doctors, consultants and pharmacists, who had received good response from the market
The SME Start-up caters for SMEs entering into any start-up project ready for commercialisation, while SME Procurement is a pre- and post-contract implementation financing for vendors who have already secured contracts, especially with government-linked companies (GLCs).
SME Franchise offers loans to SMEs involved in the franchise industry while SME Global focuses on export-oriented companies that have linkage with strategic partners for global coverage.
The establishment of this bank would provide the needed financial support for SMEs to move the country forward just as it did to KIA in Korea, which started with the manufacturing of bicycle then proceeded to the manufacturing of automobiles.
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