Gov't committed to growth of SME's
Gilbert Boyefio
31/07/2006
Government has set up a partial credit guarantee scheme of $20m aimed at indemnifying Banks against any losses in respect of lending to Micro-Small and Medium Scale Enterprises in the country. As part of the scheme, the International Finance Corporation will provide a guarantee of 50 percent to Banks on losses on their MSME loan portfolios.
Speaking at a GJA Media dialogue series under the topic: "Key Government Policies for the Promotion of Micro and Small Scale Enterprises", the Minister of Trade, Industry and PSI, Alan Kyerematen, said, the role and importance of the Small and Medium Scale Enterprises in the economy of Ghana cannot be over-emphasised.
He said it is estimated that 70 percent of all industrial establishments are in the Small and Medium Enterprises sector. It is also estimated that 85 percent of manufacturing employment and to a larger extent overall employment growth in the country comes from the sector.
He said his Ministry is committed to its policy agenda of promoting, developing and growing a vibrant, productive and competitive SME sector that generates sustainable employment, creates wealth and addresses spatial imbalance in development, because SME's have a significant contribution to make to Ghana's socio-economic development and growth, and also the attainment of its middle income status of $1,000 per capita per annum by the year 2015.
Mr Kyerematen said Government is facilitating SME financing, which involves improvement of SME?s access to appropriate forms of capital such as the African Development Foundation fund which provides long term lending for equipments and working capital to SME's in the agro-based sector, and the Micro Finance and Small Loans Centre, which is under the office of the President and provides finance through the Rural Banks for non-lending SME's.
He further cited other financial assistance available to SME's as the Italian Fund, a $10m fund which is intended to be used to procure machinery and equipments. He however said that procurement under this facility is limited to Italian goods only.
He said to compliment government efforts in this direction, his Ministry has established an SME directorate to provide strategic policy direction and guidance for the development of the SME sector. He said the directorate also coordinates interventions by all other MDA's in SME development.
He noted that other government strategic policy for the SME sector includes expanding market access, which involves the facilitation of innovative marketing schemes to enhance SME's access to domestic and external markets, and entrepreneurial skills development through harmonisation and coordination of entrepreneurial programmes and activities of various training agencies so as to enhance the managerial, technical and other competencies of SME operators.
On infrastructural support to the sector, Alan Kyerematen disclosed that plans are far advanced to establishing a modern furniture production enclave in the Tema Free Zones which will host and incubate high growth, competitive small scale furniture producers and wood processors.
He said the Ghana Industrial and Commercial Estates Limited which is sponsored by SSNIT have provided a production space for SME's at Weija. He said the facility was basically an industrial estate where various small enterprises and artisans practice their trade.
He observed that despite these benefits, the tremendous potential of SME's is yet to be fully realised because most of them are ignorant of these interventions. According to him, the fundamental requirement for the success of these programmes is a stable macro economic environment. He said efforts are being made to remove all bottlenecks constraining SME's development.
31/07/2006
Government has set up a partial credit guarantee scheme of $20m aimed at indemnifying Banks against any losses in respect of lending to Micro-Small and Medium Scale Enterprises in the country. As part of the scheme, the International Finance Corporation will provide a guarantee of 50 percent to Banks on losses on their MSME loan portfolios.
Speaking at a GJA Media dialogue series under the topic: "Key Government Policies for the Promotion of Micro and Small Scale Enterprises", the Minister of Trade, Industry and PSI, Alan Kyerematen, said, the role and importance of the Small and Medium Scale Enterprises in the economy of Ghana cannot be over-emphasised.
He said it is estimated that 70 percent of all industrial establishments are in the Small and Medium Enterprises sector. It is also estimated that 85 percent of manufacturing employment and to a larger extent overall employment growth in the country comes from the sector.
He said his Ministry is committed to its policy agenda of promoting, developing and growing a vibrant, productive and competitive SME sector that generates sustainable employment, creates wealth and addresses spatial imbalance in development, because SME's have a significant contribution to make to Ghana's socio-economic development and growth, and also the attainment of its middle income status of $1,000 per capita per annum by the year 2015.
Mr Kyerematen said Government is facilitating SME financing, which involves improvement of SME?s access to appropriate forms of capital such as the African Development Foundation fund which provides long term lending for equipments and working capital to SME's in the agro-based sector, and the Micro Finance and Small Loans Centre, which is under the office of the President and provides finance through the Rural Banks for non-lending SME's.
He further cited other financial assistance available to SME's as the Italian Fund, a $10m fund which is intended to be used to procure machinery and equipments. He however said that procurement under this facility is limited to Italian goods only.
He said to compliment government efforts in this direction, his Ministry has established an SME directorate to provide strategic policy direction and guidance for the development of the SME sector. He said the directorate also coordinates interventions by all other MDA's in SME development.
He noted that other government strategic policy for the SME sector includes expanding market access, which involves the facilitation of innovative marketing schemes to enhance SME's access to domestic and external markets, and entrepreneurial skills development through harmonisation and coordination of entrepreneurial programmes and activities of various training agencies so as to enhance the managerial, technical and other competencies of SME operators.
On infrastructural support to the sector, Alan Kyerematen disclosed that plans are far advanced to establishing a modern furniture production enclave in the Tema Free Zones which will host and incubate high growth, competitive small scale furniture producers and wood processors.
He said the Ghana Industrial and Commercial Estates Limited which is sponsored by SSNIT have provided a production space for SME's at Weija. He said the facility was basically an industrial estate where various small enterprises and artisans practice their trade.
He observed that despite these benefits, the tremendous potential of SME's is yet to be fully realised because most of them are ignorant of these interventions. According to him, the fundamental requirement for the success of these programmes is a stable macro economic environment. He said efforts are being made to remove all bottlenecks constraining SME's development.
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