Lifeline for SMEs — Govt provides cheaper funding sources
Small and Medium Scale Enterprises (SMEs) can now access a large pool of funds under a special initiative instituted by government to enable players in that sector to access support to scale up their businesses and cement their status as the growth engine of the economy.
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Dubbed the SME Growth and Opportunity Programme (SME GO), the initiative will bind the public and private sectors together to create a stronger ecosystem for SMEs that will spur economic growth in the country.
At an interest rate of 9%, SMEs can access loans of between GH¢150, 000 and GH¢2 million.
Additionally, a grant of GH¢150,000 can be accessed to purchase, maintain and repair agro-processing equipment and machinery.
The Minister of State at the Ministry of Finance, Abena Osei Asare, who announced this in Accra said, “In the last three weeks, we have engaged 3,250 SMEs across the other 15 regions”.
Funding sources
She said the government is supporting Ghana Enterprise Agency (GEA) and Ghana EXIMBANK with GH¢700 million while the Development Bank Ghana is committing about GH¢1.2 billion.
The International Finance Corporation of the World Bank is committing US$400 million to support SMEs through Participating Financial Institutions (PFIs) while the African Development Bank has pledged US$40 million.
She said the partnership is a robust framework meant to stand by Ghanaian businesses to overcome their financial predicaments.
Ms Osei Asare was speaking at a programme to climax the final engagement with owners of SMEs after a month-long stakeholder sensitisation of the SME GO programme at the Africa Trade House in Accra.
She said the government will nurture SMEs to make the enterprises a permanent feature of Ghana’s socio-economic development.
“SMEs are the backbone of regional and local economies, and SMEs face surmountable constraints that stifle their growth and expansion,’ she stated.
Mrs Osei Asare revealed that SMEs have great potential, and with the needed support, they can overturn the country's post-colonial economic misfortunes.
She said the SME GO will intentionally provide access to financial resources, expertise and capacity-building programmes that will empower these SMEs to drive innovation, create jobs and stimulate economic growth.
“We have used these occasions to elaborate on the eligibility criteria and how to access support, including funding,” she noted.
The acting director in charge of finance and support services at GEA noted that SMEs in the agricultural sector, construction firms and tourism and hospitality industries can access funds to scale up their businesses.
Solving financial challenges
Head of the SME Department of the Ghana Export and Import Bank (GEXIM Bank), Bright Evans Darko, said his outfit will not only provide capital to SMEs but do so at an affordable concessionary rate.
“We will provide SMEs, not only with capital but a concessionary interest rate of nine per cent per annum to address the access to finance challenge that SMEs have had all this while,” he stated.
He entreated businesses to sign up for the programme through the Ghana EXIM Bank, Consolidated Bank Ghana and the GEA.
He added that the bank will also provide technical and production assistance to SMEs as support for their business.