SMEs urged to develop one-page foreign exchange policy document

The cedis poor performance on the foreign exchange market in recent times is exposing businesses, especially small medium scale enterprises to risks. Quite a number of them are already said to be folding up.

With the future looking quite uncertain, it has become imperative for small businesses to take proactive steps to shield themselves against shocks. The question however for most of these businesses is where to begin from.

Addressing the September edition of the Union Savings and Loans SME Clinic Economist, Dr. Settor Amediku who is also with the Financial Stability Department of the Bank of Ghana urged SMEs to develop a one page foreign exchange policy document.

“Such policy document will help them identify risks, monitor risks and manage risks on a regular basis so they will not be taken by surprise” Dr. Amediku told JOY BUSINESS.

Dr. Amediku also urged small businesses not to enter into long-term contracts to avoid foreign exchange losses and diversify imports.

Meanwhile as part of efforts to encourage local consumption, Union Savings and Loans says it’s ready to partner small businesses that want to enter into local production. Excessive importation has been identified as contributing to foreign exchange losses.

“We know that for them to do that they need to, they have to acquire equipment, machinery and battery and these things are capital intensive. We want to enter into partnership with them so Union can provide funding opportunities and together with their expertise and knowledge they can increase local production in the long term and strengthen this currency”, Dominic Donkor, Head of Business Division said.

Union Savings and Loans SME Clinic was introduced in June this year to help SMEs build their capacity.

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