Business News of 2014-01-29

Ghanaian importers to benefit from credit facility

The Ghanaian-German Economic Association (GGEA) has launched a product that will provide financial assistance and credit facilities for Ghanaian importers.

The product, which offers assistance in finding supply sources in Germany and obtaining supplier’s credit, is being promoted in partnership with Lenzfinance Management (LFM), a Germany-based financial institution.

Members of the GGEA and Ghanaian importers who are able to meet the specific requirements will be able to assess credit of 500,000 Euros for a short-term of one year and a long-term facility of up to 10 million Euros without having to provide any collateral.

At the launch of the product in Accra yesterday, the President of the GGEA, Mr Stephen Antwi, said the rationale behind the introduction of the product in Ghana was to address the challenges faced by Ghanaian importers when assessing financial assistance from local banks.

“One of the major problems confronting businesses in the country is access to and cost of finance. This problem has, over the years, hindered the operations and activities of businesses and those aspiring to enter into business,” he said.

Mr Antwi said the product was targeted at companies that needed financial assistance to enhance their activities, adding, “Once the criteria or the requirement is met, you need no struggle to assess credit facility.”

According to him, the high interest rate, coupled with laborious banking systems, often soiled the appetite of businesses and prevented many companies from investing or expanding.

“Here, the system is open and simple to cater for any companies with the intent to import goods,” he added.

How the product works

The Chief Executive Officer of LFM, Mr Wolfgang Lenz, said LFM provided finance from outside the domestic sector at conditions which resulted in lower cost of finance and partly longer periods of credit.

“The product itself combines supplies with finance options. Therefore, the first step is to define the details and specifications, the quantity and terms of goods to be imported,” he said.

According to him, the next step was to analyse the financial strength of the Ghanaian company, adding that LFM would compare the type and volume of the desired imports to the financial capacity of the Ghanaian company.

Asked why the company chose Ghana, he said in Africa, Ghana was predestined to be a front-runner in the sub-Saharan region because of the peaceful political situation in the country and the economic growth.

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