Businesses must make themselves attractive to banks for funds - Investment banker

Head of Investment Banking Project Financing Unit at Stanbic Bank, Ms Celiwe Ntuli, has observed that the business community was not focusing on factors that would attract banks to support their businesses.

“Making profit is not a guarantee for attracting capital to finance huge projects. It goes beyond this and I am afraid a number of corporate institutions have not come to terms with this,” she said.

Ms Ntuli made the observation at the Ninth Biennial West Africa Mining and Power Conference, which brought stakeholders in the Ghanaian mining and power generation industries in contact with Sub-regional and African players as well as international investors and global industry executives.

WAMPOC 2012, which was on the theme: "Deepening Partnerships for the Sustainable Development of Africa’s Energy and Mineral Resources", offered delegates the opportunity to discuss the current state and development trends in the mining and power industries.

The Investment Banker said many corporate institutions failed to employ competent financial advisory bodies to assist in structuring documentations for credit to embark on major projects.

Ms Ntuli said banks expected full disclosure from corporate entities to inform the lender about the state of the business and how the funds sought would assist in the growth of the business.

“While most businesses fail to pay attention to detail, most corporate entities hold information to themselves and this makes banks skeptical about lending to them. Funds lock up because businesses simply do not understand what banks need,” she said.

Citing an example from Stanbic Bank, Ms Ntuli said the bank had created an advisory desk at its Investment Banking Unit to offer businesses the required financial advisory services to ensure that the best steps were taken to grow and sustain businesses.

She outlined an eight-point action plan for securing financing to participants saying, satisfying the points “will surely enable corporate giants and start ups to secure the needed funding to support their businesses.”

Ms Ntuli said Standard Bank as a group spent about a billion dollars in support for natural resources exploitation on the continent in 2011, an amount, she said, was likely to increase this year.**