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SME's ..... The
Focus of Financial Institution Muscle
By Kwesi Konadu, Ghanadot
Accra, April 26, Ghanadot - Financial Institutions over the
last few months have directed or redirected their
activities, products and services at the Small and Medium
Enterprise (SME) industry all in a bid to renew focus and
direction towards meeting their SME needs, which forms the
chunk of the private sector, the
engine of growth.
This development is seen by many as a good strategy by the
banks to reach out to the otherwise un-banked community and
the SMEs who usually do not get the services of most of
these financial institutions. It is known that these
financial houses hitherto loved to do business with the very
big companies or multinational companies.
The trend is further seen as an endorsement of the potential
of the sector and its relevance in development and revenue
mobilization as a whole.
Therefore, a number of these banks have outdoored products
and services which fully target
the SMEs and the low income
earners. A careful analysis of the financial statements of
the some of the banks makes a significant revelation of the
amounts dished out.
UniBank (Ghana) Limited, a wholly owned Ghanaian bank is a
typical example. They have made giant strides in the
industry with a primary focus to provide a comprehensive
range of services aimed at personal customers and small and
medium enterprises (SME’s) because this segment offers
opportunities, as well as a significant pivot for the growth
of the economy.
UniBank has thus rolled out several products tailored to
meet specific needs of customers including the Employee
Privileges Loan designed for employees of reputable
organizations who though are not account holders will be
catered for with a maximum facility of ¢150 million.
The uniCar Loan Facility is also designed to help salaried
employees purchase vehicles of their choice. The bank has
also designed a Credit Facility namely uniChurch Credit
Facility to assist churches access credit to put up places
of worship, conference halls and purchase musical
instruments, among others. The Small and Medium Industry
Loan Expansion (SMILE), on the other hand, is a facility
that is provided to SME’s for business expansion, working
capital finance and the offer of free advisory services.
Mr Lawrence Adu-Mante, Managing Director of the Ghana
Commercial Bank recently hinted that GCB has not changed its
objectives since the new banks came into the country, "GCB
is a national bank, and the fortunes of the economy are
linked to those of GCB, and therefore GCB will continue to
help especially the Micro, Small and Medium Enterprises so
that they can grow to become big corporate customers."
"Nothing has changed, we are still performing as GCB. The
purpose for which we were established is as relevant today
as it was 50 years ago when GCB was established, the only
differences are that we are enhancing ourselves in ways that
makes us just as good as any other financial house.
The MD further noted during the bank’s AGM that during the
2006 financial year,150.0 billion cedis was disbursed among
the SMEs alone. The SME loan portfolio according to him,
thus rose rose from ¢43.4 billion to ¢193.4 billion in 2006.
Another indigenous bank, the HFC Bank Ghana limited has
added yet another innovative service to its range of
products, making the bank one of the creative financial
institutions on the Ghanaian banking scene currently.
The HFC Business Loan Centre recently launched will help
entrepreneurs, industrialists and traders grow their
businesses while offering banking services to match the
needs of its customers with its business advisors on hand to
evaluate customers’ businesses and deliver growth oriented
solutions.
The HFC BLC will offer business advisory services, financial
and accounting services and entrepreneurial and management
skills training for all including the SME's.
According to the Managing Director, Mr. Asare Akuffo, the
centre is aimed at deepening HFC’s participation in the
Small and Medium Enterprises sector of the economy, adding
that the bank has taken “this important step because our
country is basically an SME economy”.
According to him, the catalyst for the economic development
of countries is achieved by empowering entrepreneurs,
particularly those in the SME sector, expressing the belief
that, it is a tested and tried approach to economic
development.
HFC's objective, he noted is to make a difference with the
businessmen and women who are ready to accept the challenges
of the new Ghana and the new era of doing business.
A new service to be known as Boafo Micro Finance Services
Limited has also been outdoored by the Bank The joint
venture, 51% owned by HFC Bank and 49% owned by CHF of
Washinmgton DC is aimed at addressing the housing needs of
low income earners as well as financing businesses such as
the Small and Medium Enterprises (SMEs).
Good Old Barclays Bank of Ghana also just last week launched
its latest product in the banking industry, the Barclays Aba
Pa, within the Central business district of the capital.
The new product is to rope in the un-banked within the
Ghanaian community. The Barclays Aba Pa comprises the Aba Pa
Current Account and the Aba Pa Savings Account.
The Aba Pa accounts have been designed to address the needs
of both the under banked formally employed and the under
banked informally employed. The under banked formally
employed are those employed but with low income levels below
¢500,000, most of whom are likely to be employed by the
public sector, multinational companies and local corporate
NGOs.
The under banked informally employed may include people who
are intermittently employed or employed with minimal level
of job security and low income levels who may likely be
employed by SMEs, domestic mining or construction firms.
The development of this new trend in the banking industry is
certainly a good sign that the Ghanaian economy is receiving
the right boost needed to move it into the middle income
status and the accelerated growth that is so much desired.
Kwesi Konadu, Accra, April 26, Ghanadot
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