EDIF approves more than GH¢70 million loans

Accra, July 29, GNA - Export Development Investment Fund (EDIF), which was set up to provide financial resources for the development and promotion of export trade, says it has approved loans of GH¢73.8 million to exporters and producers of export goods over the six years of its existence.

Speaking at a forum organized by the Ghanaian-German Economic Association on Financing the Private Sector, Mr. Kwabena Nkrumah, Acting Chief Executive of the Fund, said the beneficiaries of its funds were the private sector.

He said an additional GH¢23.19 million was also spent within the same period to facilitate export development and promotion with 40 per cent of the resources going to the private sector while the research institutions which provided support to exporters took the rest. Mr Nkrumah said both existing and new businesses qualified for EDIF assistance. To benefit from the Fund, companies or enterprises must be wholly Ghanaian owned or partly owned but with Ghanaian majority shareholding.

He said a major attraction of the EDIF facility was the low interest rate on its loans, which was deliberate to enhance the competitiveness of the country's goods on the export market. Current interest on EDIF facilities is 12.5 per cent. Mr. Nkrumah called on entrepreneurs to take advantage of the fund to expand their businesses.

Other speakers at the forum advised the entrepreneurs to explore various financing options instead of total reliance on banks for credit. They argued that there were currently various opportunities for businesses to explore to engender long-term growth of their businesses. Mr Andy Ojei, Managing Director of Zenith Bank Ghana Limited, said while the banks could help, the capital market would remain one of the most convenient and affordable sources of long-term funding. He said between 2005 and 2007 about seven companies, which were listed on the Ghana Stock Exchange, jointly raised about GH¢ 90m in Initial Public Offers.

Over the past two years, the market has been successful in raising additional equity to listed companies in rights issues with Ghana Commercial Bank, HFC Bank and Super Paper Products Company. These jointly raised approximately GH¢ 57 million

Entrepreneurs, he said, could also look up to mergers and acquisitions by pooling together resources - technical, managerial and financial - to ensure attainment of set goals due to synergy. Mr Alhassan Andani, Managing Director Stanbic Bank, said there was the need for balance between the proportion of investments going to the public sector and the private sector. He said banks and other sources of finances would be able to meet entrepreneurs' expectations for funds only when they had a clear compelling and institutionalised business vision to deliver outcomes. There is also need to establish rules, regulations, ethics and governance principles to sustain business into the future. He said the agriculture sector was still not getting a fair share of credit because of structural rigidities in the sector.