SMEs are pivot for growth - Veep

The Vice President, John Dramani Mahama, has observed that inadequate infrastructure development and trade libralisation have weighed against efforts by Small and Medium Scale Enterprises (SMEs) to achieve their full potential.

“The result of the influx of cheap products into the country cripples local manufacturing companies, thereby inhibiting economic growth,”he said.

SMEs form over 90 percent of the total industrial sector and contribute about 58 percent of employment generation in the country.

The Vice President made these observations at the launch of the FirstBanC SME Centre in Accra.

He said: “Government admittedly must take part of the blame for the lack of sustained growth in the SME sector. The demand for collateral security in the form of landed property by banks and other financial institutions worsen SMEs financial woes.”

Mr. Mahama also mentioned inadequate and inappropriate record-keeping and the cost of borrowing in the form of high interest rates as part of the problems that require urgent attention.

“What most SMEs require is just a small amount of credit to purchase simple machinery and equipment or as working capital.

“Such credit is however hard to come by. Without viable SMEs, we should not expect the economy to achieve the growth required to take us into middle-income status by 2015,” Mr. Mahama said.

FirstBanC SME Centre is a private sector initiative in collaboration with the National Board for Small Scale Enterprises (NBSSI) aimed at the transformation of SMEs and the informal sector as a whole.

Most businesses in the private sector have been unable to grow and realise their full potential due to high cost of finance, inadequate skills and poor management information systems.

Mr. Mawuli Hedo, Executive Director of FirstBanC Financial Services, in a presentation explained that the SME Centre is designed to offer creative business advisory services that will propel SMEs to realize their full potential.

The centre aims at moving a large section of SMEs out of the informal to the formal sector.