Banks pledge support to SMEs

A financial dialogue has been held in Accra by TechnoServe Ghana between investors and Small and Medium Scale Enterprises (SMEs), whereby banks and financial institutions have offered to support the SMEs sector with financial, technical and advisory support services at very flexible terms.

The pledge is encouraging to the SME sector, which has faced tougher financing for their business as banks and other financial institutions have continually tightened access to credit against the background of a challenging business environment impeded by the ongoing erratic energy supply.

Speaking at the dialogue session, Samuel Baba Adongo -- Ag. Country Director of TechnoServe --noted that the vast majority of jobs in developing economies are provided by Micro and Small Enterprises (MSEs).

He however bemoaned the low success rate of transforming from MSEs to larger companies due to lack of access to finance, as well as lack of access to business development services and networks that help incubate small businesses.

He said TechnoServe, through the Enhancing Growth in New Enterprises (ENGINE) support programme, organised the dialogue session to create the platform for networking between the SMEs, financial institutions and angel investors.

“Unlike in more developed economies, successful enterprises that support each other or facilitate access to early-stage investors are limited, resulting in many small firms being stuck in survival mode with no support networks,” he said.

Francis Opoku- Mensah, Enterprise Finance Manager of TechnoServe, highlighted the role Technoserve plays in developing MSEs.

“TechnoServe, with funding from the UK government through the Department for International Development (DFID), is currently running a multi-year enterprise development project dubbed Enhancing Growth in New Enterprises (ENGINE) to support 500 Micro and Small Enterprises overcome barriers to growth and improve competitiveness -- by equipping them with the necessary skills and resources to improve their business plans and internal operations, while creating a thriving community of entrepreneurs through increased access to business development services and finance,” he said.

Some of the financial institutions present at the programme mentioned some of their packages designed to help Small and Medium Scale Enterprises (SMEs).

A Senior Account Manager of Ecobank Ghana, Kingsley Adofo-Addo, said the bank has a keen interest in developing the capacities of SMEs; and as a result has launched an SME club that focuses on bringing together all SMEs which form part of the club to help them ply their trade outside the boundaries of Ghana.

Festus William Amoyaw, Portfolio Manager of Acumen -- an equity investment firm, also outlined some of the products designed to help SMEs grow.

“We have invested in an anti-counterfeit product, whereby people can text to a code and verify the authenticity of their products. Apart from providing financial assistance, we also provide technical support for them to solve their problems.

“We have what we call ‘Global Fellows’ so we can be able to bring on board into an organisation some skilled labour from other established institutions to help these businesses overcome some of the challenges they face. Our focus is on the poor, so we tend to focus on businesses that transform the lives of the poor,” he said.

The Managing Director of Injaro Investment Advisors Ltd., Jerry Parkes, mentioned that Injaro seeks to partner with companies operating in Ghana which will have a positive impact on smallholder farmers and low-income persons.

“We like to invest in businesses that purchase products from farmers, create jobs for people in rural areas, add value to local products and sell them profitably... so that both we and the company can make financial returns.

“The fund is an equity investor that aims to offer advisory services to companies. We work to understand the challenges they face and, based on our experience and the experiences of some consultants we bring on board, we can guide the company on the best path to achieve success,” he said.

Some of the entrepreneurs also aired their reasons for being present at the dialogue session.

Kwabena Danso, CEO of Booomers International Ltd., a company that uses bamboo to manufacture bicycles and export them outside the country, expressed his satisfaction with the programme’s outcome.

“I came to this programme to talk to possible funders and let them know what my idea is and the business I am doing, so that I can get them to support my interest and my company to move it to the next level. So far, I have talked with some and their responses are positive,” he said.

Francesca Brenda Opoku, CEO of Solution Oasis -- manufacturer of skin care products from shea butter, said that ENGINE initially supported her business with £6,000 as start-up capital. However, her business is at its growth stage and needs a prospective equity investor to pump money into the business and meet the growing demand.

“I came here with the purpose of looking for good capital, particularly patient capital. So I have identified a few and submitted my profiles. I am hoping that when they go into the details and do the necessary due diligence, I will get a good investor,” she said.