Capital SME initiative launched to enhance access to capital by small businesses
The British High Commission, in conjunction with a working group of local and United Kingdom (UK) financial institutions in Ghana, has launched an initiative aimed at getting small and medium-size enterprises (SMEs) listed on a unique type of stock exchange called the Ghana Alternative Market (GAX).
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The move is expected to enhance access to capital by SMEs in Ghana.
The initiative, dubbed Capital SME, will stimulate commercial activities and increase trade opportunities as well as foreign investment and international partnerships.
The GAX, administered by the Ghana Stock Exchange (GSE), was launched in 2013 to accommodate Ghana’s business community, and is targeted at businesses with potential for growth.
At the launch of the Capital SME in Accra on Wednesday, the British High Commissioner to Ghana, Mr Jon Benjamin, said the ultimate aim of the initiative was to stimulate private sector-led growth in Ghana in line with the UK government’s economic development policy in Ghana.
Demographic time bomb
Stressing the need for the creation of more jobs, Mr Benjamin said the country was sitting on a “demographic time bomb” regarding unemployment among the youth, and that it was crucial that steps were taken to create more jobs.
That role, he said, could not be left to the government, since “governments do not create jobs” but the framework and enabling environment that would spur the private sector on into creating jobs.
He said it was the SMEs that possessed the potential to grow into big industries that would create jobs to transform the lives of “well educated young people in Ghana”.
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Towards that end, he said, talks had been initiated with the government to ensure that all barriers to the growth of SMEs were removed and the enabling environment also created for SMEs to blossom.
High interest rates
Mr Benjamin bemoaned the high interest rates being charged by the commercial banks on loans, and said the situation tended to scare off SMEs in securing the needed capital for business expansion.
He added that banking institutions were not the only source of raising capital but there were other options available hence the need for SMEs to get listed in order to take advantage of other opportunities that existed for raising the required capital.
The Capital SME, he said, “has been designed to burst the myth that SMEs cannot list” due to inadequate capital.
Capital SME timely and opportune
The Director of the Public Investment Division of the Ministry of Finance, Mrs Magdalene Apenteng, said the creation of Capital SME was timely, especially at a time when capital had become expensive.
She said that SMEs had and would continue to be the backbone of the economy in view of their capacity to mobilise resources for growth.
Mrs Apenteng indicated that the growth of SMEs had gained traction and that the government was committed to providing the needed support to ensure that they performed at their best to augment the country’s middle-income status.
She said it was imperative for SMEs to list on the GAX, since it was a credible platform that afforded the opportunity for visibility and access to capital.
Besides, she said, listing on the GAX came with tax incentives that SMEs could take advantage of and expressed the hope that the setting up of the Ghana Exim Bank would also provide support to SMEs.ter’s email: victor.kwawukume@graphic.com.gh