Forms Capital to offer competitive loans to SMEs

Forms Capital, one of the country’s formidable finance houses, is set to assist small and medium-scale enterprises (SMEs) in the country with working capital at competitive rates to enable them to expand their business without much financial stress.

The company is also poised to provide emergency loans to construction companies, public sector workers, among many others, to enable them to meet urgent financial needs.

The commitment comes at a time when the government is about to announce a major move to create room for private sector players to play a more formidable role in the growth of the economy while creating more jobs avenues for the people.

The Chief Executive Officer of the company, Mr William Arthur, told the Daily Graphic in an interview in Accra at the weekend that Forms Capital would also intensify efforts to add value to the credit offered its clients to enable them to derive optimum value from such funds.

Unlike the market, he said “the company has a corporate finance unit to advise on which kind of capital is needed by the client and provide the support to meet their needs”.

“Sometimes, some people come and they want to raise short-term capital to undertake long-term projects”, he said, but noted that “we do not consider the margin to be made, we offer tailor-made advice to ensure that the funds sought fit the project for which it is being taken”.

In what is expected to be a welcome news for the players in the SME sector, the government is also on the verge to announce modalities to actualise its pledge to ensure that the private sector players took full advantage of the “One district, One factory’ initiative.’’

Forms as a universal bank

Mr Arthur said Forms Capital did not intend to become a universal bank but was positioned to operate systems of a typical finance house by applying the tenets of banking in the industry.

He said the vision of the company was to facilitate growth of businesses by offering its clients with a wide range of services which bore the semblance of a bank but ‘‘will not be a universal bank”.

Expansion/tech

“We also seek to establish and roll out branches in all regional capitals of the country,” he said, adding that “by the end of the first quarter of the year we will begin the roll-out to ensure easy access to our services and products”.

Mr Arthur said the company would leverage the evolution of technology in the financial services sector to reach more people to enable them to access with ease, what the company had to offer.

“Our expansion will be achieved by employing a number of financial technologies also known as (fintech) and these will include mobile technologies to reach clients.”

Mr Arthur said the company had started experimenting electronic banking systems by adopting easily accessible systems that employed mobile money to reach the informal sector to deposit and receive funds.

NPLs

Sharing his thoughts on why non-performing loans (NPLs) are so high in the country, he said such situations normally arose from government arrears, especially from players in the construction sector.

Mr Arthur said to help reduce the high NPLs in the system, the government had to be loyal with its payment obligations to companies it awarded contracts.

“For instance, if the government awards a contract and does not pay on time, the impact goes beyond just the contractor because the finance institutions that they borrow from also suffer,” he said.

He stated that projects that had not been budgeted for should not be awarded.

According to him, the strategy to minimise arrears is to be selective in the type of government contracts to provide loans on.

He said companies that made an approach for loans must be taken through proper screening “by asking the relevant questions and scrutinising all details of the contract before making any advances to them.”

Mr Arthur said Forms Capital was good at scrutinising projects in a manner that would ensure that “the owner of a contract will not lose for the company to also lose.”