COMMENT: EDAIF cash can be disbursed at a lower percentage

Business News of Sunday, 21 April 2013

Source: Thompson, Kofi

By Kofi Thompson

It would appear that many of the banks in Ghana, are just as greedy and sly as banks in the wealthy nations of the West.

Alas, like their counterparts elsewhere, they too are moated fortresses of the mundane, with thickened walls of pedestrian thinking – whose slippery drawbridges, guarded by dissimulation, are seldom traversed by creative thinking.

Is it not scandalous that a fund meant to help increase the number of district-level SME’s engaged in the export trade and empower them – thereby improving Ghana’s balance of payments; whiles creating wealth and jobs in rural Ghana – is being seen instead as a main-chance cash cow by fat cats in the banking industry?

What justification could there possibly be for well-heeled banks in Ghana to insist on making as much as 10 percent profit, merely for acting as conduits for the disbursal of funds from the Export Development and Agricultural Investment Fund (EDAIF), which is given to them by the EDAIF secretariat at just 2.5 percent interest?

Dr. Paa Kwesi Nduom, who demonstrated leadership in such dramatic fashion, and showed that he believes in accountability and transparency, and practices it in his own affairs – by publicly publishing the results of his medical examination, to prove he was physically fit to be President; put his filed tax returns in the public domain; and declared the sources of funding for his Progressive Peoples Party (PPP) during the December 2012 elections – now has an opportunity to do something just as radical, in the banking industry.

He can position his First National Savings and Loan Company as a leading bank in Ghana, when it finally receives its retail banking licence.

He can do so by approaching the EDAIF secretariat to do a deal with it – by giving a written undertaking that if given most of the EDAIF funds to disburse nationwide, his First National Savings and Loan Company will add just a 1 percent coupon rate, plus 0.5 percent as administration fees, and set up branches in all the districts in Ghana to work closely with the EDAIF secretariat, to disburse the funds expeditiously to exporting SME clients at just 4 percent, and in transparent fashion.

That will be the First National Savings and Loans Company’s CSR contribution to the growth of Ghanaian SME’s engaged in the export of non-traditional products.

And what SME exporter in Ghana, able to borrow money at such low rates of interest, will fail to succeed, I ask?

Let the EDAIF secretariat make a fresh start – by holding a beauty parade of banks interested in disbursing funds from the EDAIF at just 4 percent.

It will be pleasantly surprised to discover that it will end up with more honest and better organised successor partners – a world of difference from those currently disbursing cash from the EDAIF in that shabby and opaque lets-ripp-off-the-system fashion. A Word to the wise…

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