Provide transparent business information to attract funding - UMB CEO advises SMEs

The Chief Executive Officer (CEO) of the UMB, Nana Dwemoh Benneh, has advised small and medium enterprises (SMEs) to open up and provide transparent information on their businesses to attract the right investments.

He said for businesses to secure funding from local and international investors, they must give a clear set of details that could stand the scrutiny of investors such as business drivers, potential markets, envisaged growth and what guaranteed their successes.

For banks, he said, financial institutions also desired to understand the sustainability of every business, the right governance structure and targeted market to commit funds to SMEs.

“What we have learned about most Ghanaian businesses is that they are very passionate in going ahead with a business but they are not as passionate as documenting what actually makes that business tick,” he said.

Achievable success

Sharing his perspective on challenges regarding securing funding for businesses in Ghana with the Daily Graphic on the sidelines of the Canada Ghana Chamber of Commerce last Friday, Mr Benneh said: “Financial information on our company normally leaves a lot to be desired but for you to attract somebody to come and put money in your business, they need to have a transparent view of what your business looks like so that when they put money in it, they know to what extent success is achievable.

“These are the exciting things that once we have sorted out, it is easy for an investor to put money into a business and hope that the business will grow,” he said.

Partnerships

Owing to the challenge SMEs had in accessing funding, the CEO of UMB said his outfit currently focused on partnerships with SMEs so they could work together to help businesses provide the set of information that stood the scrutiny of every investor.

Such partnership, he said, would allow SMEs to attract investors to put their money into their businesses because “one can understand clearly what your business drivers are and where it is heading to”.

Trade barriers

In relation to the African Continental Free Trade Agreement (AfCFTA), Mr Benneh said the beauty about AfCFTA was that it offered huge opportunities to indigenous banks to overcome many trade barriers.

“What we at UMB are so pleased about is that suddenly the barriers of entry in doing business with other banks across Africa are being removed,” he said.

He explained that Afreximbank had set up the Pan-African Payment and Settlement System (PAPSS), a platform that allowed banks to trade with businesses in other countries and pay locally.

“This system has suddenly opened a huge opportunity for banks, including UMB, to collaborate with indigenous banks in other countries and we can seamlessly turn money across.

“So, we can now envisage partnerships of local banks from one country to the other; in the same way, it works for businesses as well,” he said.

Mr Benneh cited how Ghana imported flowers from the Netherlands in spite of the fact that those flowers were grown in Rwanda, Uganda and Kenya.

“So, why do these flowers have to go from Rwanda to Netherlands before they come to Ghana?

These are the key areas of business that are now open,” he said. 

DBG

On the issue of challenges in accessing long-term loans by SMEs, Mr Benneh said most commercial banks were normally good at funding short-term needs of businesses, which he said was not helpful to businesses that needed funding for medium and long-term projects.

He, therefore, described the establishment of the Development Bank of Ghana to provide medium to long-term loans as “one of the best things to happen in Ghana”.

That was because the bank would not demand immediate repayment of loans by businesses.