The Bank of Ghana (BoG) has taken steps to improve access to credit for micro, small and medium-sized enterprises (MSMEs) through the banks, savings and loans companies, microfinance companies, and rural and community banks.

This is according to Mrs Elsie Addo Awadzi, Second Deputy Governor of the BoG.

Speaking at a forum themed “MSME Manufacturing Capabilities, Responding to COVID-19 and Opportunities Beyond,” organized by the ENGINE Business Network (EBN), she said:

“I encourage all EBN members to approach their financial institutions to explore financing and other opportunities available for MSMEs, and in particular for youth and women entrepreneurs. In addition to financial services, a number of these financial institutions are increasingly providing technical, entrepreneurial, and market access support to MSMEs to help make their businesses more viable.

“I encourage you also to engage actively with the Ghana Association of Banks, and industry associations representing the savings and loans companies, microfinance companies, and rural and community banks, to help these institutions better understand the needs of EBN members and to fashion out specific products and services to support you.

“We are at the Bank of Ghana, are committed to ensuring that our policies and regulatory measures help to promote macroeconomic stability and growth, not only for a few, but for all Ghanaians. By promoting monetary and financial stability, we seek to create an enabling environment that supports all economic players to contribute their fair share to socio-economic development and nation-building.

“In addition to bringing down inflation and interest rates over the last three years, the Bank of Ghana has cleaned up the banking and SDI sectors, promoted emerging technologies to support digital financial services that make retail payments more convenient and that expand access to critical financial services such as savings, loans, insurance, and pensions even for the informal sector.

“We have also successfully launched the Ghana Deposit Protection Scheme, which helps to protect hard-earned savings of entrepreneurs like yourselves, so that you are not left vulnerable in the event that your financial institution collapses.

“The Bank of Ghana has also recently launched the Ghana Sustainable Banking Principles in partnership with the Ghana Association of Banks and the Environmental Protection Agency.

“These are a set of seven principles adopted by banks in Ghana in November 2019, by which they commit to scaling up lending to five key sectors of the economy1 in a manner that promotes good environmental management practices and social justice including through gender equity and access to finance for all.”

She further noted that the clean-up exercise undertaken by the Bank of Ghana (BoG) that led to collapse of some nine local banks in 2018 inadvertently prepared the financial sector of the Ghanaian economy to deal with the impact of the coronavirus pandemic, Mrs Elsie Addo Awadzi, Second Deputy Governor of the BoG, has said.

“The successful completion of major reforms in the banking, savings and loans and microfinance sectors by the Bank of Ghana prior to the onset of the pandemic, has played a significant role in cushioning the impact of the pandemic on our economy.

“Banks and other financial institutions are now better able to support their customers at this critical time. Smaller financial institutions, however, are themselves at high risk given that many of their clients are MSMEs who are significantly impacted by the pandemic and as a result have had difficulty in servicing their loans.

“Regulatory reliefs recently provided by the Bank of Ghana to the savings and loans, microfinance, and rural and community bank sectors, were therefore designed to help ease the burden on them and by extension their clients,” she said.

Mrs Addo Awadzi added that : “It is encouraging to see that banks and SDIs have responded to policy and regulatory measures recently announced by the Bank of Ghana. For example, bank and SDI lending rates have declined on average by about 2 percentage points (200 basis points) since the end of March 2020, and banks have recently advanced new loans in the region of GH¢3 billion to support manufacturers of pharmaceutical products and PPEs, to help in the fight against the pandemic. What is more, banks and SDIs have agreed to defer some customer loan repayments by granting moratoria from about 3 months to 12 months. Fees on a number of electronic payments and related transactions have also been waived or reduced.

“While these policy and regulatory interventions have been the initial responses to help contain the impact of the pandemic, the real work lies ahead of us all. How will our economy recover from this unprecedented major shock? How will our MSME sector recover? What would the post-COVID economic landscape in Ghana look like?

“As challenging as the current situation is, we must not lose hope. No one knows how long the pandemic will last for, but surely a day will come when we can put it behind us. It is important, in the meanwhile, that intentional efforts are made to keep the MSME sector alive so that it can support the post-COVID economic recovery effort. It represents, after all, 85% of our national economy.

“Notably, the MSME story in Ghana has not been a single-sided story. In spite of the enormous challenges the sector faced before and during the pandemic, the resilience of this sector has also been evident. Even during the lockdown, small food processing businesses, eateries, and others worked hard under very difficult and risky conditions to produce food and other products and services for households and other clients.

“Micro and small fashion businesses very quickly stepped in to help produce face masks for use by the public. Production of hand sanitizers and other health and safety products suddenly became possible in Ghana. With the continued easing of COVID-related restrictions, it is heart-warming to see that the MSME sector is slowly, but surely, bouncing back.

“This is a part of the MSME story that needs to be amplified. I have always been intrigued by the relentless spirit of the Ghanaian entrepreneur, who against all odds, always finds a way to move forward in their business endeavours. It is this spirit that needs to be promoted and supported to help build a stronger and more resilient Ghanaian economy, post-COVID 19.

“In planning for the post-COVID economic recovery, we need to address a few critical issues. How can the MSME sector be supported and positioned to help turn the disruptions in global supply chains into a national advantage, and thereby build a more self-reliant and resilient economy? How can we ensure that the post-COVID Ghanaian economy leaves no one behind?

“To do this, we need critical public-private sector investments in key infrastructure over the medium-term to increase the manufacturing capacity of our economy. We need to re-tool and re-equip the MSME sector to leverage technology for more innovation. We need to increase access to finance for MSMEs. We need a renewed focus on equitable and inclusive growth to ensure that the MSME sector, and in particular, women and youth entrepreneurs are not left behind. I am very glad to see that you have lined up very distinguished speakers who will be speaking on these issues at this forum.”