The Chief Executive Officer of BEIGE Capital, Michael Nyinaku, has commended the Bank of Ghana (BoG) for setting up the Collateral Registry backed by efficient lending system.
“I think the setting up of the Collateral Registry at Bank of Ghana, is one of the laudable things that has happened to the financial and business sector in recent times” Mr. Nyinaku said.
Mr Nyinaku was speaking at the maiden international conference on business management and entrepreneurial development organised by the University of Professional Studies, Accra.
The conference was on the theme: “Management of SMEs (small and medium enterprises): issues, challenges and opportunities.”
He added that with such database, government financing assistance to SMEs could also come in handy where the financial market has failed or become inaccessible.
About 85 per cent of jobs in the country are being created by the SMEs and they also contribute 70 per cent to the nation’s Gross Domestic Product, according to Nyinaku.
“When the SME sector is booming, other dependent industries such as management consulting, tax preparation, auditing, advertising and banking also thrives,” he added.
Mr. Nyinaku also spoke concerning the high rates of borrowing for small businesses and advised upcoming firms to be circumspect of such debts, especially during the early years of their operations.
He noted that SMEs borrow at exorbitant cost and are often dwarfed or crowded out by the government and big corporations in accessing funds, leading to many going to SME banking.
On dealing with some of the challenges facing the SMEs, Mr. Nyinaku proposed continuous business management capacity training for entrepreneurs, to instill the knowledge and skills required to properly manage the businesses they have started.
He also noted that the lack of confidence in the ability of the SMEs to effectively manage their businesses so they can repay the loans, is one of the reasons the financial institutions refuse SMEs loans.
He suggested a coordination of all disjointed training programs under a single umbrella where training programs offered could include accounting, business management, and preparation of business plans, financial statement analysis, personnel management and marketing.
The BEIGE Group CEO also suggested “Government financing assistance to SMEs to be ideally managed by an apolitical body that will administer the funds on purely the basis of merit and not on the grounds of any other criteria” he said.
“Call it a bail out or a YES fund, the underlining objectives are similar” to finance SMEs.