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• Alex London 11 years ago

  In Ghana banks do not lend on viability. This is because the banks do not ask for business plans to enable them to assess the viability of the proposals. This, in the main, is due to the fact the banks have no knowledge and ...
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  In Ghana banks do not lend on viability. This is because the banks do not ask for business plans to enable them to assess the viability of the proposals. This, in the main, is due to the fact the banks have no knowledge and expertise to assess the viability or otherwise of a business plan. If a small business person goes to bank for borrow the first question the bank would ask is have got a property for collateral. If you have not got it you would not get the loan.
  By lending on collateral the banks are putting the customers properties at risk
  In Ghana we have consultants and not business advisors. Consultants do function well where the businesses have some form of formal organisation structure in place. Most SMEs need business advisors and not consultants. I have had an opportunity to view business plans prepared by some consultants for SMEs in Ghana for some funding agencies in Ghana. What I noted was that the business plans were prepared for the consumption of the funder only, which in fact should be be the other way round . In one document, there were nearly 30 pages of financials. Funding agencies appear to go for the thickness of the business plans. And when you look at plan and the educational background of the owner manager or director there is no way he or she would understand what is written in the document. A business plan is a working document for every entrepreneur and for the purpose of monitoring performance it is a vital.
  Using it to raise funding is secondary. It is often said in business not planning is planning for failure.
  
  In the UK and all the advanced economies when a business person goes to bank to borrow money to start up a business or to expand an existing one, the first thing the bank will ask is not collateral but a business plan which will help them to assess the potential viability of proposition e.e will the business be able to service the loan?
  
  South African is one of the very few countries in Africa who have a professional association of Business Advisors.
  
  I have had an opportunity to train business advisors from EMPRETEC Foundation (Ghana) in London was being launched. The last time I checked all the advisors have been recruited by banks
  
  We need to start to consider business advisory and counselling services as a ma major components of support services for the SMEs

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• Kobby London 11 years ago

  Alex thanks very much, I fully support your advice.
  I hope the financial institution and business owner will read this contribution

  Alex thanks very much, I fully support your advice.
  I hope the financial institution and business owner will read this contribution

  reply