Business News of 2014-07-15

Help upgrade expertise of SMEs-BoG urges banks

The Bank of Ghana (BoG) has urged lending institutions to go beyond giving out loans and offer more support towards the training of players in small and medium scale enterprises (SMEs) to improve their performance.

The Relationship Manager for the Banking Supervision Division of the bank, Mr Alexander Koomson, who gave the advice at the official opening of the Union SME Clinic in Accra, observed that such a move would help to enhance the SMEs’ ability to repay their loans.

The clinic was established by the Union Savings and Loans Company to provide holistic business solutions, and also offer capacity development services to employees and management staff of small and medium scale companies.

“The SMEs are where the risk is enormous and we are happy about the move by Union to help reduce the non-performance aspect of the risk, not only by providing financial support but also through management training,” Mr Koomson said. He noted that non-performing loans, particularly in the SMEs, were a bother to the BoG, and expressed the hope that other institutions would take up the SME clinic idea and develop it further.

According to the Managing Director of Union Savings and Loans, Mr Philip Oti-Mensah, the establishment of the clinic is in line with the company’s business philosophy of successfully combining commercial objectives with a strong development agenda.

“We hope to achieve this by focusing our financial intermediation efforts on segments of the market that lack the needed attention and expertise from the regular financial services sector,” he said.

The Managing Director observed that presently, access to finance in terms of loans was no longer a challenge to the SMEs in Ghana. The problem, he said, was capacity and how to manage the businesses. “These are the biggest factors that cause businesses to collapse, hence the need for the establishment of the clinic." The Chairman of the Board of Directors of Union, Mr Baba Issah, noted that Ghana’s economic growth rested on the performance of entrepreneurs. “There is therefore the need for Union to support SMEs to grow,” he pointed out.

In a statement issued by the Business Development Unit of the company, the management of union said: “We do recognise the gap that exists between the banks and the SMEs and our solution is in our specially trained and dedicated Client Relationship Officers (CROs). Every SME gets a relationship officer whose goal is to provide tailored services and capacity development support.”

The operations of the SME clinic will be in three main parts: Regular formal classroom training, which shall be held on a monthly basis at Union’s SME Clinic training room; and quarterly clinics that will be organised in the last month of every quarter at a conference venue in the regional capitals.

There would also be business centres, which would be established at the main SME clinic at the Union head office, selected branches, and at convenient locations (usually at traffic-free neighbourhoods), where there would be meeting rooms, Internet access, printers, scanners, photocopiers, trendy business technologies and a library.

Source: graphic.com
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