Kufuor urges banks to give more funds to SMEs

Accra, March 25, GNA - President John Agyekum Kufuor on Tuesday inaugurated the BSIC Ghana Limited, a Sahelo-Saharienne Bank for Investment and Commerce, and made a demand on banks to provide more funding for micro, small and medium enterprises. Enhanced financing to these enterprises, which constitute more than 90 per cent of the country's private sector, he said, would lead to overall phenomenal growth of the economy.

He reminded the banks that capturing this sector amounted to capturing the larger share of the market. BSIC Ghana is the second bank to start operations in the country this year and has targeted project financing, regional trade and agro-processing among its main priority areas.

President Kufuor said the Government appreciated why, for years this critical area had been perceived as high risk and expressed the hope that the passage of the Credit Reporting Act was going to help to develop appropriate credit infrastructure with the requisite security to attract increased funding.

President Kufuor was unhappy that the degree of competition in pricing by the banks continued to remain weak despite the entry of a number of new ones into the industry over the last couple of years. "Lending rates are still high. I hope the presence of BSIC Ghana will generate such competition as will lead to lower rates," he added. The opening of the bank, the 12th in Africa so far, followed a memorandum of understanding signed in Accra at the eighth session of the Ghana-Libya Joint Commission, by which Ghana acceded to the membership of the Sahelo-Saharienne Community.

Membership of the Community is open to all African countries and the Red Sea and Indian Ocean African States. President Kufuor said BSIC Ghana was a good example of co-operation between nations, as well as fruitful partnership between the public and private sector.

He pointed out that more than ever before, there was now need for closer co-operation among African nations to survive in the global economy.

"Much has already been achieved, but there is still more to do to change the circumstances of the people for the better." Professor George Gyan-Baffour, Deputy Minister of Finance and Economic Planning, said the bank's presence was an indication of the positive and sustained growth of the economy.

The Governor of the Bank of Ghana, Dr Paul Acquah, said there was considerable deepening of the finance services sector with substantial increase in bank deposits, total assets and loan portfolio. He said he was optimistic that the new bank would make important contribution to the financial sector.

Mr Al-Hadi Alwarfalli, the General Manager, pledged to serve as important partners of development.