Financial institutions in the country have increased loans advanced to commercial drivers, as they seek to divert their portfolio and maximise returns.

Commercial banks and some savings and loans companies, with a keen focus on SMEs, say the initiative is creating entrepreneurs amongst the economically active members of the working population while recording very minimal impairments.

Enoch Donkoh, Acting Chief Executive Officer of Global Access Savings and Loans said: “Our core clients are Small and Medium Scale Enterprises (SMEs). We have products for commercial drivers in the forms of auto loans, schools and churches. In terms of lending, auto loans comprise about 60 percent of our loans. I don’t see why someone should be a driver’s mate for the rest of his life.

“We try to support the economically poor and those who can purchase their ‘trotro’ we do it. That is why you see many of the cars branded ‘Global Access’. We want to move people from driving other’s cars to be car owners. In this case, we know we are making people entrepreneurs.”

Stanbic Bank, First Capital Plus Bank, Global Access Savings and Loans, Union Savings and Loans, and Adehyeman Savings and Loans are some of the few operators involved in providing auto loans to commercial drivers.

The SME sector is a major contributor to the country’s Gross Domestic Product (GDP). A recent study by Bastiat Ghana showed that about 92 percent of all registered companies in the country can be classified as micro, small and medium scale enterprises.

Eighty five percent of the SMEs were engaged in manufacturing, while the others were engaged in various economic activities including retailing, and commercial transport.

Commercial vehicles, otherwise known as ‘trotro’ are the main mode of transportation for thousands of Ghanaians across the country. For the city centres, they remain the most reliable means of transportation for many as they go about their daily activities -- in the absence of the much touted Bus Rapid Transportation System.

The Driver and Vehicle Licencing Authority (DVLA) in 2013 registered as many as 174, 234 vehicles, which was 22.86 percent more than that reported the previous year.

At the same time the DVLA inspected about 946,284 vehicles for road-worthiness, bringing the total vehicle population in the country to nearly a million, with concentration in the two biggest cities, Accra and Kumasi.
While private vehicles form a significant number, a large number of commercial vehicles -- taxis and trotros -- were equally registered yearly.

The Non-Performing Loans (NPLs) in the SME sector -- brought on by poor address systems, lack of a national identification database and poor book-keeping -- have over the years been cited as the reason for tightening credit to the players in the sector. But the auto loan segment seems to be doing well and rising above the negative tag, as Mr. Donkoh notes.

“The default rate is quite minimal, controllable. The only challenge is the occasional break-down of the vehicle that makes it seem as if they are defaulting, and we understand that. There may be some arrears which may not be their fault. That is manageable.”