The Chief Executive Officer of Dalex Finance, Ken Thompson, wants government to reconsider its decision to allow the National Board for Small Scale Industries, NBSSI, to disburse the 600 million cedis stimulus package for SMEs.
According to him, financial institutions are in a better position to disburse the money efficiently and ensure full recovery.
It will be recalled that, in his nationwide address on Sunday, 5th April, 2020, the President announced that government, in collaboration with the National Board for Small Scale Industries (NBSSI), Business & Trade Associations and selected Commercial and Rural Banks, will roll out a soft loan scheme of up to a total of six hundred million cedis (GH¢600 million), which will have a one-year moratorium and two-year repayment period for micro, small and medium scale businesses impacted negatively by the COVID-19 pandemic.
The money is expected to be disbursed in May this year, and the NBSSI has stated that it will set up an online portal to receive applications and disburse the funds.
But the Ghana Union of Traders Association, GUTA, wants a committee established to agree on the modalities for disbursement to benefit SMEs in the informal sector.
Speaking to Citi Business News, the Chief Executive Officer of Dalex Finance, Ken Thompson, said NBSSI is not the right vehicle to disburse the money.
“The organisation that has the most extensive connection with small businesses are the financial institutions such as the microfinance companies, rural banks, savings and loans companies, and finance houses recruited by the banks. Are you telling me that the NBSSI has more experience in lending to these small businesses than those I have mentioned?” he asked.
“For me, I think that we really need to go back to the drawing board. It is not about how beautiful your portal looks. It is about making sure that all the parties have a chance in the game. This money is taxpayer’s money. We are gone pass the stage where we are throwing money away. Let’s work through established financial institutions that have been doing it for years. They know how to leverage the money and they have continuity,” he said.
We can help Gov’t disburse GHS600m SMEs loan – Savings & Loans Assoc.
Recently, the leadership of the Ghana Association of Savings and Loans Companies, also said it was ready to support government in the disbursement of its GHS600 million stimulus package set aside to assist small and medium scale enterprises affected by the COVID-19 pandemic.
Executive Secretary of the Association, Tweneboah Kodua Boakye, who spoke to Citi Business News after the Association made a donation to the National COVID-19 Treatment Centre at the Ga East Municipal Hospital, said they’re well-positioned with over 540 branch networks in all 16 regions and 6 million clients to disburse the package.
“The Savings and Loans companies have the structures to also help the disbursement of these funds to SMEs. We can do the evaluation, the recovery, the monitoring and all these things. We can also continue to offer advisory services because we have the networks across the country, in all the 16 regions. And so we believe that if the government also uses the savings and loans fraternity to do the evaluation and disbursement of funds to support, it will also boost the liquidity position of the companies and help strengthen the companies themselves.”
“It will also give the opportunity for government to even know what these companies are doing and one can be very certain and sure that recovery of loans is going to happen. And so we believe that we are in a better position for the government to also pay attention to the Savings and Loans fraternity.”