The Bank of Ghana has called for the creation of an enabling environment for Small and Medium Scale Enterprises (SMEs) as a complement to the traditional measures such as the provision of direct and subsidized credit being used currently to promote the SMEs sector.

The Central Bank believes also that the focus must be to broaden the coverage and impact of government programs by using the private sector to deliver the services and to use the scarce public resources to facilitate market transactions and invest in public goods.

Standing in for the Second Deputy Governor of the Central Bank, Millison Narh, at a workshop for SME clients of the Eximguaranty Company Ltd, Director for Research at the Central Bank, Johnson Asiama intimated that there are market failures that create cost disadvantages for SMEs, restricting their access to markets and inhibiting their development for a diverse range of services for small firms.

“There is therefore the need to address the transactional efficiency in financial, product and input markets relevant to SMEs,” Dr. Asiama contended, explaining that this can be done by facilitating access to information and development mechanisms to manage risk.

Dr. Asiama said that it was in recognition of the potential role of SMEs in the nation’s development that the central bank has been active in the promotion of their growth over the last three decades.

The research director of Bank of Ghana listed a number of initiatives such as the Credit Guarantee Scheme for Small Borrowers, the IDA-financed Fund For Small and Medium Enterprises Development (FUSMED) and the Private Enterprise and Export Development (PEED) and other direct interventions as some of the initiatives the bank has participated in over the years to promote the growth of SMEs.

He said the bank engineered the establishment of Eximguaranty Company Ltd in 1994 in line with its goal of promoting credit delivery to SMEs through the provision of credit guarantees.

Currently, according to Dr. Asiama, the Bank has been participating in the Rural Financial Services Project (RFSP) which is aimed at broadening and deepening the financial intermediation in rural areas.

He called for a second look to be taken at public policies and regulations that discriminate against small firms or produce fixed costs that create competitive disadvantage for SMEs

“We need to invest in public goods that open market access and build enterprise competitiveness including infrastructure such as communications, information, energy, water, transport as well as education and technology for development,” Dr Asiama urged.

Opening the workshop, Minister for Trade, Hannah Tetteh urged local companies to build their skills and capacities so that they can compete favourably with international competition in the upcoming oil and gas industry.

“If you do this right, you would not need to depend solely on government magnanimity or ‘whom you know’ in order to operate in the competitive market place. The Minister noted.