The Managing Director of the Agricultural Development Bank, Mr Owusu Ansah, on Monday advocated a discriminatory tax incentive policy to meet the needs of Small and Medium-scale Enterprises (SMEs).

He said revenue from such tax cuts would enable the SMEs to adopt practical means to enhance their growth. However, Mr Ansah said, this could only be managed by the government within the framework of good fiscal and economic policies so as not to cause any imbalance.

He was speaking at a symposium on the theme "Innovation and Industrial Growth in the Ghanaian Economy" organised by the Association of Ghana Industries as part of Indutech 2001.

He spoke on "The role of finance in industrial growth through technology". Mr Ansah underscored the essential role that finance plays in the growth of businesses but added that the traditional role of banks to stimulate industrial growth through loans is in the main not sustainable.

The banks, he said, are in most cases unable to cope with the high-risk exposure in the long run, especially through default in payment of loans, rendering them incapable of assisting others in need.

Mr Ansah said the absence of a credit rating system that will enable banks to assess the worth of their customers before advancing any loans to them further incapacitates them.

He said the only way now is to look for more innovative means of helping industry through schemes such as the Venture Capital, Partial Guarantee, Industrial Growth Fund and Mutualist Funds, adding that most of these schemes have enough security to amortise the debts that may occur.