Staff of the World Bank and International Finance Corporation (IFC) have paid a courtesy call on the CEO of BEIGE Capital, Mr. Mike Nyinaku.
The meeting was to, among other things, confer with him on how financial institutions are supporting Small and Medium Enterprises (SMEs) in Ghana.
Discussions centered on how stakeholders in the informal sector of the economy can contribute effectively to the growth of the national economy.
Another area of interest in the discussion was how the SMEs could be assisted to access credit facilities in order to make them competitive.
Speaking to the subject as the CEO of the largest company in the Savings and Loans industry in Ghana, Mr. Nyinaku stressed that it will not be practicable for Ghana to succeed in the quest to achieve financial inclusion for the masses if it neglects the informal sector.
He said that while transaction process enablers such as mobile money is supporting the drive for cashless economy, even for the micro level, access to credit will remain a big barrier to achieving a total financial inclusion.
In his words, one of the major barriers inhibiting access to credit is the legal system.
He contended that in spite of the introduction of the lenders and borrowers act, the time it takes to secure judgment, coupled with the difficulty in executing judgment in the case of loan default makes the provision of credit to the informal sector unattractive.
He further stressed that as a people we have been socialized in a way that rejects any effort at debt recovery.
He said it is interesting to note that in some parts of Ghana you can’t execute an item of collateral because no one in that part of the country would want to buy that item of collateral.
He attributed the success of BEIGE Capital Savings and Loans to its ability to adapt and customize international credit delivery approaches to suit the unique circumstances of Ghana’s informal sector.
In his words, he said it’s not always the case that there are bad borrowers, but sometimes there are also bad lenders. He expressed the willingness of BEIGE Capital to engage IFC on any potential partnership that will inure to the benefit of both institutions.
The representatives of the World Bank who attended the meeting were a Senior Operations Officer, KalizaKaruretwa, a Private Sector Development Specialist, Anne Ytreland and the Director for Growth Solutions Development LLC, Gaiv Tata.
Source: Beige Capital