Elsie Addo Awadzi
Second Deputy Governor, Bank Of Ghana (BOG), Elsie Addo Awadzi, has described Absa Bank Ghana and the Mastercard Foundation’s initiative to lend to Small and Medium Enterprises (SMEs) at a rate of 10 per cent, without collateral, as revolutionary.
According to the Deputy Governor, the initiative per its design will address the SME finance gap in many ways including scaling up the volume of loans to SMEs, requiring no collateral for loans of up to GH¢ 1 million; and supporting such borrowers with much-needed capacity building and business supporting services.
“There is no gainsaying that SMEs are the bedrock of our economy, accounting for over 92 percent of all businesses many of which are owned by women and young entrepreneurs, and contributing about 70 percent of Ghana’s GDP,” she said.
She however noted that despite the important role played by SMEs in the country, access to finance for SMEs remains a perennial challenge, indicating that the finance gap impedes a critical segment from surviving, growing, and playing a more meaningful role in the socio-economic development.
Thus, while acknowledging the two institutions for the feat chalked, she challenged them to do even more by deepening their partnership to ensure that even more SMEs benefit from this initiative beyond the 5,000 expected at this juncture.
“I also expect that even lower interest rates will be offered to SMEs with time especially as inflation continues on a downward path as we have seen consistently over the last four months including with the just-released inflation reading for April 2023 at 41.2 percent down from 45 percent in March 2023,” she noted.
The initiative is a landmark move set to transform the landscape of small and medium-sized businesses (SMEs) in Ghana as it marks a turning point for women-owned businesses, young entrepreneurs, agribusinesses, and fintechs in Ghana.
By Jamila Akweley Okertchiri