Eximguaranty introduces six-month credit guarantee for SMEs
Eximguaranty Company Ghana Limited has introduced a new service dubbed, ‘Letter of Intent’, to help Small and Medium Enterprises (SMEs) access more credit from financial institutions.
The Letter of Intent is a six-month provisional guarantee offered by Eximguaranty to SMEs to allow them to easily access credit from banks and other financial institutions that usually demand collateral.
Anthony Dwumah, Head of Guarantee Operations, told the B&FT that basically, the Letter of Intent is to address the issue of inadequate collateral and facilitate the flow of credit from financial institutions to SMEs.
“The situation has been that banks will require a fall back or collateral before a facility is given and our processes have been that the bank will have to approve of the facility and then apply to us for the guarantee.
But we also realise that because of these requirements the SMEs, sometimes, do not even go to the bank at all because of the issue of collateral,” he said when a team from Eximguaranty paid a courtesy call on the Managing Editor of the B&FT, William Selassy Adjadogo.
“What happens is that we will do our due diligence on the SME and when we find it credible then we will issue a Letter of Intent or provisional guarantee so that the SME can use that to source for credit from the bank of its choice.
If the SME is successful in accessing the credit, we then proceed to regularise the provisional guarantee to become a full guarantee, to the financial institution to offer the credit,” he added.
Eximguaranty usually offers 75percent guarantee of whatever credit SMEs are looking for but cannot go beyond a maximum of GH¢4million.
“To the bank, the guarantee is more liquid because if there is default you can easily fall on the guarantee but if it is a landed property you may have to go to court and it could take a long time but for the guarantee it is simple,” he added.
The courtesy call>
According to Dwumah, the courtesy call was to deepen engagement with the media, and to explore more ways of collaboration with the B&FT in deepening public education on credit guarantee.
Managing Editor of the B&FT, William Selassy Adjadogo, lauded Eximguaranty Company Ghana Limited for its role in supporting SMEs to access credit, and to expand their and create jobs. He assured the company of B&FT’s support for businesses in the economy. “We are a business paper that is ready to support businesses, to help grow the economy,” he added.
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