The First Deputy Governor of the Bank of Ghana, Dr. Maxwell Opoku-Afari, has challenged small and medium scale enterprises (SMEs) across the country, to access the various financial support programs government has been rolling out in the aftermath of the coronavirus pandemic.
He says this will ensure that the companies build their capacity to locally produce sought after goods during and after the pandemic.
He made the remarks at the launch of the $2 billion dollar Ghana Care Guarantee Scheme in Accra.
The new scheme adds to a number of programs being rolled out by government like the GH¢1 billion Coronavirus Alleviation Programme Business Support Scheme, to help Micro, Small and Medium-Scale businesses access funds in order to cope and even thrive in the era of the pandemic, which the World Bank says would lead to growth in Sub-Saharan Africa falling by -3.3 percent in 2020.
Speaking at the launch of the Ghana Care Guarantee Scheme, which is a new arrangement that guarantees loans to be taken by SMEs from some select banks, the First Deputy Governor of the Bank of Ghana, Dr. Maxwell Opoku-Afari, said the nature of the scheme will ensure that the high risk perception surrounding SMEs for most banks is reduced.
“It is my fervent belief that this guarantee scheme under the Ghana CARES programme would go a long way to reduce the risk perception of these SMEs, help reduce their cost of borrowing and increase their access to appropriate financing. This in turn should enable them to produce more to meet both local demand and to provide decent livelihoods to households that depend on them. A unique feature of the Ghana CARES program is that it is being done through the provision of guarantees rather than cash handouts, and it is less distortionary to both the financial system and beneficiary’s own sustainability going forward.”
“It is therefore my wish that all qualified SMEs will take advantage of this timely and innovative policy intervention when the policy framework, which has already been developed, is fully operationalized to help sustain and grow their businesses in support of the national effort to restore and place the economy on a path of faster growth and development post-COVID 19,” he added.
On his part, George Yaw Gyan Baffour, Minister for Planning, said in order to allay the fears of participating banks, to ensure that they lend more to businesses, the new scheme will guarantee up to 80 percent of all loans taken by businesses from some selected industries.
“The scheme will guarantee up to 80 percent of credit extended by participating banks to the clients. And under this initiative we are targeting specific industries within Agribusiness, manufacturing, hospitality and tourism as well as the technology sector of the economy.”
Speaking on behalf of industry, Dr. Yaw Adu-Gyamfi, the President of the Association of Ghana Industries (AGI), said industry will reward government’s confidence in them with improved levels of production and performance in general.
“We are the instruments of change, and we can only create the needed change when we have the financial muscle. We are more than grateful for the opportunity given us by the President and his government.”