Absa Bank Is Transforming The SME Landscape In Ghana
Absa Bank has
set out to undo the most critical issue facing traders and small businesses in
Ghana today - access to finance.
There is no doubt about it; SMEs contribute over 80% to the country’s GDP growth.
These businesses are the bedrock of economic stimulation, advancement and
stability. Ghana’s history and its performance to date is in some way
attributable to the enterprising resourcefulness of its SMEs – especially
micro-traders, artisans and small set-ups.
However, unlike their counterparts in large institutions, multinationals and
other corporate setups, access to finance continue to be a critical bottleneck.
In cases where access to finance becomes available, the rates are extremely
high and exorbitant, which affects the willingness to apply or access. The
situation gets trickier when for specific loans, the insistence on collaterals
is enforced to cut off a section of these small business operators. Many
advocates have called for a second look at the economic regime and relaxed
complications to enable such businesses to thrive. The Ghana Union of
Traders Association (GUTA), the mother body for most traders and retail
businesses have often bemoaned the lack of flexibility in the financing regime
and has called for the government and the private sector to do something about
it.
It is in this light, that Absa Bank Ghana partnered with the Mastercard
foundation under the Young Africa Works (YAWS) scheme to fund and train 5,000
locally-owned businesses with the aim of creating 50,000 jobs in Ghana. The
5-year (2020-2025) strategic partnership between Absa Bank Ghana and the
Mastercard Foundation (MCF) has a goal to create dignified and fulfilling jobs
for young men and women in Ghana. The project also supports MSMEs through
capacity building, training and lending. As part of implementing its
capacity-building mandate, YAWS will assign Business Development Service (BDS)
providers to these individual SMEs to identify the gaps in their business operations
and proffer bespoke training and solutions in addressing them. After the
training, these businesses would be further assessed for lending purposes in
order to ensure the sustainability of their establishments.
The other day in Accra, in front of over 350 members of GUTA, Absa signed a
Memorandum of Understanding (MOU) with the executives of GUTA, outlining in
great detail the terms of the partnership, including the nature of businesses
that qualify to access loans under the YAWS scheme. Absa bank has even gone
above its call of duty to defray a lot of associated costs that affect
businesses when they access loans in Ghana. For example, the MOU allows
businesses under GUTA to access loans of up to GHC500,000 without collateral
and GHC1,000,000 without collateral to women-owned businesses, with an
additional 1% discount for all eligible businesses.
“What Absa Bank has done is a welcome gesture in the government’s drive to
empower and sustain these businesses in advancing the country’s economic
growth. I want to urge the traders and business folk gathered here to focus on
how to carefully manage the returns on your business in order to ensure
sustainability and continuity. Let us refrain from unnecessary spending on
perishable items and instead reinvest in the business,’ said Deputy Minister,
Honorable Nana Ama Dokuah, who was the special guest of honour at the MOU
signing ceremony.
The faces of the traders at the ceremony reflected a high sense of optimism and
excitement about the prospect of seeing their businesses transform with the
partnership. To add to the energy in the room, videos of former loan recipients
sharing testimonies of their transformation were shared on the screens by Absa
Bank. These videos did a lot in reinforcing the viability of the partnership
and a call to action.
Commenting on the collaboration with GUTA, Managing Director, Abena Osei-Poku,
with excitement in her voice, highlighted what the association with GUTA means
for the bank.
“I hope that by the end of this session and the signing of the MOU, you will be
left in no doubt about Absa’s commitment to stand beside you, in ensuring that
your success and growth are guaranteed, making you ready to participate fully
in the huge opportunity that the African Continental Free Trade Agreement
(AFCTA) presents. We hope to use this avenue to firmly entrench our position as
the go-to bank for all your needs and expectations.”
So, whether you are a micro-level business operator or fall in the category of
a medium-sized business in Ghana, you need not be burdened by the inadequate
access to funds for expansion and diversification. The Absa – Mastercard
Foundation partnership falls right into the heart of your specific need and is
the panacea for overcoming the future challenges in the sector.
Source: Peacefmonline.com