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Twenty-two million Euro credit to support SMEs
Accra, May 26, Ghanadot/GNA - A
22-million Euro credit line to support growth of Small and
Medium Enterprises (SMEs) and enhance their contribution to the
country's development was launched in Accra on Tuesday.
Known as the Ghana Private Sector Development Fund, the credit
facility made available by the Italian Government would allow
beneficiary SMEs to finance capital goods, spare parts,
consumable production inputs and services.
The agreement also provides for viable start-up companies.
This is the second phase of the project initiated in 2003 to
provide a lifeline to SMEs to foster economic development and
reduction of poverty in the country.
An amount of 10 million Euros out of the facility, was fully
disbursed between 2003 and 2008 with 29 SMEs in the
agro-processing, construction, mining, auto services and health
related services, benefiting from the first phase of the
project.
The loan of 20 million Euros has an interest rate of zero per
cent with a moratorium period of 20 years and a repayment period
of 36 years.
Ghana Government is bearing all exchange risks connected with
the credit.
The remaining two million Euros is a grant component and would
be used to assist the businesses in preparing and implementing
their business plans as well as for capacity building.
To be eligible for the facility, SMEs must be wholly Ghanaian
owned and must be part of the production or of the service
sector as well as not make use, directly or indirectly, of child
labour.
The total level of support for each SME would vary between
25,000 and 550,000 Euros in local currency to be channelled
through local financial intermediaries.
Beneficiary SMEs are mandated to purchase 70 per cent of their
supplies from Italy while the rest 30 per cent could be obtained
from local sources.
The credit agreement, which was approved by Parliament on
December 4, 2003, however, excludes SMEs, which operate in the
farming sector, harm the environment or deplete natural
resources, make use of child labour or have direct or indirect
link with military activities, wood working, furniture
production and tobacco processing.
Speaking at the launch, Ms Hanna Tetteh, Minister of Trade and
Industry, said the development of a vibrant private sector was
key to the achievement of growth, expansion and diversification
of the economy.
She said government's vision was to create a nation of
innovative entrepreneurs, adding that the SME sector was
critical to the accelerated economic development and growth
agenda of the country.
However, the meaningful contribution that SMEs could make to
economic growth was being hampered by access to credit,
acquisition and application of appropriate technology, logistics
management, low productivity, distribution and marketing.
The government, she said, would continue to dialogue with all
stakeholders to build and sustain conducive business environment
for the development of the private sector.
Ms Tetteh expressed the hope that beneficiary SMEs would keep to
the schedule of repayment in order to guarantee the
sustainability of the financing scheme so that others could
benefit from it.
Mr Fabrizio De Agostini, Italian Ambassador to Ghana, said the
programme would promote co-operation between the private and
public sectors to develop local initiatives at district levels
and create new clusters of development.
GNA
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