Banks urged to treat Ghanaian SMEs special

The failure of most banks and other financial institutions to appreciate the unique operational styles of small scale enterprises (SMEs) are largely responsible for the credit-drought to that segment of the country’s industrial base, the Chief Executive of the Exim Guaranty (Ghana) Limited, Mrs Felicity Acquah, has said.

She has thus called on the banks and non-financial institutions to learn more about the operations of SMEs in the country to enable them to create products and services that meet the latter’s demands and funding needs.

Mrs Acquah was speaking at a sensitisation workshop on funding to SMEs the credit guarantee company organised in collaboration with Ecobank.

The workshop was on the theme: ‘The role of financial institutions in the development of small- and medium-scale enterprises (SMEs) in Ghana’. It was attended by clients of the two institutions, SME entrepreneurs and other stakeholders in the sectors.

Some staff of the Ministry of Trade and consultants in financing were also present at the one-day workshop which discussed the various funding challenges facing SMEs, what banks expect of SMEs, understanding the credit needs of SMEs among others.

While admitting that businesses in the SME sector had several risks that deter financial institutions from lending to them, Mrs Acquah said “banks also do not position themselves to appreciate the mind sets of SME operators in order to understand the structures, systems and entrepreneurial behaviour of their SME clients.”

She said although SMEs were acknowledged as major growth contributors to economic and social development, most banks and finance houses were hesitant in lending to such businesses, a development she said needed to be addressed.

“SMEs are known to be risk takers, opportunity seekers, confident and independent, persistent in their business approaches and they continually seek to maximise profits with passion,” she said.

She, however, urged  SME entrepreneurs to understand the requirements of banks which regarded the SMEs as their clients from where they expect to maximise profits, but in a structured and cautious manner.

Mrs Acquah encouraged SME owners to open up to banks and other financial institutions in times of need, saying that would enable them to get access to loans “readily and for the banks to also understand the challenges they face.”

Source: Daily Graphic