Ken Ofori-Atta
BEGINNING NEXT year, government has indicated it will begin major
interventions to boost private sector credit to support all segments of the
business community in Ghana.
Finance Minister Ken Ofori Atta, who made this known in Parliament
yesterday, said in 2019, government engaged many stakeholders with respect to
access to credit for the private sector which saw experts going across the
length and breadth of the country to meet with SMEs and artisans, proprietors
and associations to get a better understanding of the challenges they faced in
accessing credit, while the ministry also engaged the AGI, Banker’s
Association, among others, prior to this year’s budget.
“Through evidence-based research and field engagements with over 40
business associations, credit needs of micro, small and medium enterprises in
the country; government is ready to take advantage of the macro gains, and
enhanced social cohesion through our social intervention initiatives to focus
on private sector growth, home ownership and infrastructure development,
including toll roads. To anchor such shift, will be the National Development
Bank (NDB) and the Ghana Infrastructure Investment Fund (GIIF).”
Enterprise Credit Scheme
Noting
that the private sector in Ghana borrowed at over 25%, while their competitors
elsewhere borrowed at least that 5%, the Finance Minister said government was
working with the banking community to launch a two billion Ghana Cedis credit
and guarantee scheme in 2020.
This
initiative will be structured to incentivise banks to lend to private sector at
discounted lending rates. The scheme which will start in the first quarter of
2020 will be targeted at specific industries such as agri-business,
manufacturing, hospitality and tourism and the tech-sector amongst others.
Micro businesses and household lending
He
said government would also partner with Fintech companies, local banks and
mobile money operators to deliver micro credit to Ghanaian businesses and
individuals.
The
intervention, expected to deliver quick loans on favourable terms using
technology driven platforms to do credit assessment, is in line with
Government’s digitization 78 agenda.
It
offers an opportunity for MSMEs to apply for loans on their mobile phones with
minimal human intervention. The initiative will go live by the first quarter of
2020.
Long Term Institutional Investors
Mr
Ofori-Atta continued that to encourage the establishment of private equity,
venture capital and mutual funds as well as improve the ecosystem for
start-ups, the current application of VAT on management fees for these funds
would be abolished since it discouraged institutional and angel investors, both
local and foreign, from investing in such critical funds for private sector growth.
“This will improve the accumulation of long term funds in the economy to support growth and jobs.”
BY Samuel Boadi
