Business in Ghana

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SMEs Appeal For Removal of Hurdles to Access Bank Loans

Posted by Business in Ghana on October 18, 2010

By Carly Ahiable, Business in Ghana

Owners of small businesses in Accra have appealed to commercial banks to ease their rigid conditionality for loans to make it possible for more small and medium enterprises (SMEs) to access funds to develop their business.

The made the appeal during questions and answers time at the second day of a two-day business focused seminar dubbed “Nkontabuo Krakye” seminar developed to get SMEs operators to master and manage their businesses to improve profitability.

The “Nkontabuo Krakye” is carved out of a weekly business programme on an Accra radio station, the Asempa FM that educates SME practitioners on proper business management and record keeping.

It was organized by Asempa 94.7 FM in partnership with Trust Consult, a chartered management accountancy and consultancy in Accra.

Sponsored by The Trust Bank, the seminar was attended by about 100 participants from manufacturing, retail and services sectors.

The participants stated that the long standing good business relationship between owners of small businesses and bankers and the trust and goodwill built over the years was enough certification for banks to make loan advances to SMEs without asking for collateral securities which in some cases become impossible for small scale businesses to get bank loans.

The participants said notwithstanding the good track records and credit worthiness of some SMEs most banks still demand collateral securities in the form of immovable property which becomes difficult for most small businesses to comply with and thus cut them from the much needed funds to survive and grow.

According to them, the micro finance companies have taken advantage of the vacuum created and developed attractive fast-track loan packages with rigid payment regimes thus fleecing entrepreneurs and in some cases collapsed defaulting businesses instead of saving.

The participants were taken through the basic rules for SMEs and business owners in the area of accessing loans, effective record keeping, cash flow management, minimizing cost of inventory, servicing of loans and how to negotiate with creditors among others.

Mr. Charles Mensah, Managing Partner of Trust Consult, the main resource person, during his presentation advised the participants to desist from opening multiple bank accounts in the hope of getting loans from many banks.

He explained that when an SME concentrate its funds in a single account it will improve its chances of getting loan.

Mr. Mensah disclosed that banks are now using SD Data, rating service to check on the credit worthiness of new clients before offering them credit.

He therefore appealed to business owners and mangers to ensure that they were faithful with their loan payment terms to get healthy rating in the national data base.

Sampling views of participants after the closing session, Mr. Philip Ghuttliebs, Director of Tranxaxxions Limited, a motor company in Accra said the seminar was very useful and served as an eye opener for those in the SMEs sector. He hoped a follow-up appraisal programme would be held to pave the way for similar courses in the futures.

Another participant, Mr. Akwasi Appiah, Sales Manager of Safety & More Limited, suppliers industrial safety gear, said the seminar was practical and provided the basic tools to reshape their approach to managing finances of their enterprises. He was grateful to the organizers and said the knowledge acquired would help them to improve their business practices for maximum growth.

 

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