Vibrant capital market to close infrastructure gap

A vibrant capital market in the country would help close the infrastructure gap, create wealth and unleash the creative potential of the people, Mrs Mona Helen K. Quartey, Deputy Minister of Finance has noted.

She said such a vibrant capital market would also inject efficiencies in the operation of public utilities and enterprises, and turn ideas into marketable products of global dimensions.

“The capital market as part of the financial system is therefore, critical for our economic development process,” Mrs Quartey said.

She made the observation in Accra at the weekend, when Izwe Loan Limited was listed on Ghana Stock Exchange (GSE) with GH¢ 80 million Medium Term Note.

She said the small and medium enterprises (SMEs) sector continue to play a vital role, as a tool for economic empowerment of the poor.

Mrs Quartey said in Ghana, SMEs account for more than 90 per cent of business enterprises and continue to contribute largely to the creation of new jobs.

The Deputy Minister said it has been estimated that SMEs provide about 85 per cent of manufacturing employment, account for more than 90 per cent of existing businesses and are the primary driver for gross domestic product growth.

She said broadly, SMEs contribute to economic diversification, employment creation, provision of basic goods and services, and generation of export and tax revenues for the nation’s development process.

Mrs Quartey said it was gratifying to note that government’s efforts in establishing the Ghana Alternate Exchange (GAX) had begun yielding positive results, saying “the focus of the GAX on start-ups and existing enterprises with the potential for growth was a step in the right direction”.

She said, in addition, listing on the GSE also bring enormous benefits such as initial increase in company’s ability to raise funds, improve corporate governance, and the transparency in transactions of listed securities in a competitive condition.

“We therefore urge all other businesses to follow the foot prints of Izwe Ghana Ltd to use GAX as a medium to raise capital to finance new projects, undertake expansions, diversifications and for acquisitions,” the Deputy Minister stated.

Mrs Quartey said the capital market and the exchange remains the most appropriate source of capital and trading platform for all businesses seeking to raise long term financing at a relatively lower cost for their operations.

Izwe Ghana is part of the Izwe Africa Group of Companies, a Pan-African financial services with operations in Ghana, Zambia, Kenya and South Africa.

In Ghana, Izwe was registered and licensed as a Finance House in 2011 and continues to be regulated by the Bank of Ghana. Its primary nature of business is lending to government workers.

Mr Raymond Kwakye Bismarck, Managing Director (MD) of Izwe Loans Ltd said the company since opening its door in July 2011 has been committed to building a business underpinned by integrity, trust and responsible lending practices that the Ghanaian market and the Izwe Group were proud to call their own.

“We have already grown our footprint to seven branches in five different regions that are strategically located throughout the country, and we continue to seek opportunities to further extend our footprint and brand in an effort to increase accessibility to Izwe for our customers in all corners of Ghana,” he said.

He said over the past three years Izwe had established itself as one of the largest government payroll lenders in the country, with a loan book of GH? 90 million and currently serving more than 35,000 customers.

“The listing process had given Izwe Ghana the gravitas and exposure essential to building on the success of our business,” Mr Bismarck stated.

Mr Kofi S. Yamoah, MD, GSE said the listing of Izwe as the first non-banking institution on the exchange would pave the way for the listing of more non-banking financial institutions next year.

Mr Samuel Appenteng, Chairman, GAX Governing Committee said most companies in Ghana take loans from the banks at high interest rates, which they would hardly service, stating that GAX is the best option for SMEs.